Understanding Perfect Competition

Which of the following is NOT a commodity

• Gas

• Coal

• Pizza

• Gold

Which of the following is a characteristic of a perfectly competitive market?

• Few sellers

• Unique products

• Free entry and exit

• High barriers to entry

Fill in the blank: 'Barriers to entry' refer to obstacles that make it difficult for new firms to ______ a market.

• Exit

• Enter

• Dominate

• Ignore

'Start-up costs' are?

• Costs incurred when exiting a market

• Costs incurred when starting a new business

• Costs that decrease over time

• Costs that are irrelevant to new businesses.

Which of the following is a factor in market structure?

• The degree to which the firm can influence price

• The design of the office

• The number of social media followers

• The type of office furniture.

Pure competition is characterized by:

• A single firm dominating the market

• A large number of firms producing the same product

• Government control of prices

• Unique products.

Competition encourages ______.

• Laziness

• Efficiency

• Higher prices

• Less innovation.

Which type of business would have the lowest technological barrier to entry?

• Dog Walking

• medical laboratory

• payroll processing firm

• smartphone app development

With a commodity, the buyer always chooses the _______ price

• Highest

• Lowest

Which of the following is a characteristic of perfect competition?

• Single seller

• Price maker

• Many buyers and sellers

• High barriers to entry