QUESTION 4 In the model of perfect competition, firms produce a: differentiated
ID: 2440079 • Letter: Q
Question
QUESTION 4
In the model of perfect competition, firms produce a:
differentiated product with no control over price
differentiated product with considerable control over price
standardized product with no control over price
standardized product with considerable control over price
e. standardized or differentiated product with some control over price
QUESTION 6
A decreasing-cost industry is one in which:
input prices and technology do not change over time
input prices fall over time
technology deteriorates over time
input prices fall or technology improves as firms enter the industry
firms are in the growth phase of the industry’s life cycle
a.differentiated product with no control over price
b.differentiated product with considerable control over price
c.standardized product with no control over price
d.standardized product with considerable control over price
e. standardized or differentiated product with some control over price
QUESTION 6
A decreasing-cost industry is one in which:
a.input prices and technology do not change over time
b.input prices fall over time
c.technology deteriorates over time
d.input prices fall or technology improves as firms enter the industry
e.firms are in the growth phase of the industry’s life cycle
Explanation / Answer
4. The perfect competition is a market characterized by many seller and buyers, and the sellers will be producing the identical or homogenous product, because of this they don't have any control over the price. If any firm raises the prices, the consumers will switch to another product, the products are perfect substitutes. The differentiated products are produced in the monopolistic competition.
Ans: C. standardized product with no control over price.
6. The decreasing cost-industry is one which where the costs of the firm decreases as the firm expands its production. The firm will see a decrease in the average cost of the production. The decrease in the cost may be due to a fall in the input prices or the improvement in the technology.
Ans:d). input prices fall or technology improves as firms enter the industry