A perfectly competitive firm is a price taker because
A) many other firms produce the same product.
B) only one firm produces the product.
C) many firms produce a slightly differentiated product.
D) a few firms compete.
E) it faces a vertical demand curve.
A
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Which of the following statements is true?
a. If the income elasticity of demand is less than zero, the good is an inferior good. b. Only if the demand curve is vertical will sellers raise the price by the full amount of a tax. c. Two goods are substitutes if the cross-elasticity of demand coefficient is positive. d. A price elasticity of supply coefficient equal to 1.5 means the product exhibits an elastic supply and a 10 percent increase in the price will increase the quantity supplied by 15 percent. e. All of these.
Which of the following is not a characteristic of the structure of perfectly competitive markets?
a. Each individual firm is small in size relative to the overall market. b. Few sellers. c. Homogeneous product. d. Easy, low cost entry and exit.