Perfect Competition

Number of buyers and sellers in a perfect competition is

• few

• large

• 2

Entry and exit in perfect competition is

• restricted

• free

• both are correct

The product sold in perfect competition is

• Homogenous

• have close substitutes

• No close substitutes

• Both homogenous and close substitutes

Which of the following is the best example of a perfectly competitive market?

• diamonds

• athletic shoes

• soft drinks

• farming

Which of the following market types has the fewest number of firms?

• Perfect Competition

• Monopoly

• Monopolistic Competition

• Oligopoly

A price-taking firm

• cannot influence the price of the product it sells.

• talks to rival firms to determine the best price for all of them to charge.

• sets the product's price to whatever level the owner decides upon.

• asks the government to set the price of its product.

A barrier to entry is

• an open door.

• the economic term for diseconomies of scale.

• illegal in most markets.

• anything that protects a firm from the arrival of new competitors.

Which of the following is not a type of market structure?

• Competitive monopoly

• Oligopoly

• Perfect competition

• All of the above are types of market structures.

If a firm sells its output on a market that is characterized by many sellers and buyers, a homogeneous product, unlimited long-run resource mobility, and perfect knowledge, then the firm is a

• monopolist

• oligopolist

• perfect competition

• monopolistic competition

If one perfectly competitive firm increases its level of output, market supply

• will increase and market prices fall

• will increase and market prices rise

• and market price will both remain constant

• will decrease and market prices rise