Question

Which of the following is not a characteristic of a firm operating in a perfectly competitive market?

Each firm sells a virtually identical product.

Each firm is a price taker.

Each firm chooses an output level that maximizes its profits.

Blocked entry.

Answer 1

the first statement is a characteristic of perfectly competitive market where every product is same and each seller sells identical products on the whole in the second statement is also characteristic of perfectly competitive market because every seller is a price taker because the market forces determine the price based on demand and supply conditions and the third statement is also true because each seller maximize the profit by opting for a condition where the price is equal to the marginal cost.

Therefore (a,b,c) are wrong

the last statement is not a characteristic because there is free entry and exit in perfectly competitive market and that is the reason why there is no such blocked entry and therefore

(d) blocked entry is the answer to this question