Summarize the characteristics of a perfectly competitive market
What will be an ideal response?
A perfectly competitive firm produces a product that is identical to that of its competitors, the number of competitors is large and each individual producer is small relative to the market, there is ease of entry into the market, and market participants have perfect information. Perfectly competitive firms are price takers.
You might also like to view...
There are several reasons why demand curves may become more elastic. Among them are
a. the market becomes more monopolistic and cross elasticities approach zero b. the goods become less differentiated and more firms enter the industry c. consumers have fewer substitutes and firms drop out of the industry d. industry demand increases and consumers increase spending e. the existence of a natural monopoly and an increase in fixed costs
Use the following general linear demand relation:Qd = 680 - 9P + 0.006M - 4PRwhere M is income and PR is the price of a related good, R. If M = $15,000 and PR = $20, the demand function is
A. Qd = 680 - 9P. B. P = 690 - 9Qd. C. P = 680 - 9Qd. D. Qd = 690 - 9P. E. Qd = 800 - 19P.