Question

1. Which of the following is not an assumption of perfect competition? a. Full information b....

1. Which of the following is not an assumption of perfect competition?

a. Full information

b. Firms are price makers

c. Free entry and exit

d. Homogeneous products

e. Large number of buyers and sellers

.

2. The demand curve of a firm in perfect competition is

a. Vertical

b. Upward slopping

c. Horizontal

d. Downward slopping

.

3. Marginal revenue curve of a perfectly competitive firm is  

a. Not Possible

b. Same as the demand curve

c. The slope of Marginal revenue curve which is lower than the demand curve

d. Different than the average revenue curve

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Answer #1

Answer:-1) Option (b) "firms are price makers" is the correct answer.

In the perfect competition firms are price takers.

Answer:-2) Option (c) "horizontal" is the correct answer.

Demand curve of a firm in perfect competition is horizontal because all firms sell same thing so individual can't able to change market price.

​​​​Answer:-3) Option (b) "same as the demand curve" is the correct answer.

Marginal renenve curve of a perfectly competitive firms is same as demand curve because marginal revenue = market price.

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