CHAPTER 08- Perfect Competition 1. Commodity products are a. pasteurized b. blan
ID: 1128873 • Letter: C
Question
CHAPTER 08- Perfect Competition 1. Commodity products are a. pasteurized b. bland c. perceived by consumers to be identical d. made by one manufacturer e. made by hand 2. Perfectly competitive firms respond to changing market conditions by varying their a. price b. output c. market share d. information e. advertising campaigns 3. Which of the following is likely to be present in a perfectly competitive market? a. patents b. government licenses c. nonprice competition such as advertising d. high capital costs e. firms producing identical products 4. Firms in perfect competition have no control over a. all of the following b. where to operate on their average total cost curves c. what price to charge d. how many inputs to use e. how much to produce 5. Because market price remains constant as a perfectly competitive firm expands output, each firm faces a. a downward-sloping demand curve b. a horizontal demand curve c. constant returns to scale d. constant costs e. diminishing marginal revenue 6. Economic theory assumes that the goal of firms is to maximize a. sales b. total revenue c. profit d. price e. utilityExplanation / Answer
Ans:
1) Option C
perceived by consumers to be identical
Commodity products include agricultural products and metals.etc.Commodity products are perceived by consumers to be identical and interchangeable good.
2) Option B - Output
In a perfectly competitive market, firms respond by changing the output to the changing market conditions.
3) Option E
firms producing identicial products
One of the characteristics of perfectly competitive market is that firms produce identical products.
4) Option C
what price to charge
Firms in perfectly competitive market are price takers and they have no control over the price.
5) Option B
a horizontal demand curve
when the price is constant and firm expands output, each firm faces a horizontal demand curve.
6) Option C
As per economic theory, firms exist to maximize their profits.