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State whether the following statements are true or false, and explain why. Perfectly competitive firms have...

  1. State whether the following statements are true or false, and explain why.
    1. Perfectly competitive firms have no control over the price they charge for their product.
    2. For a natural monopoly, average cost declines as the number of units produced increases over the relevant output range.
    3. An oligopolist has a larger than average portion of total market share without having to do any advertising.
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Answer #1

A. True, Because, in perfect competitive market, firms are price taker and they have bo control over it.

B. True, Because the average cost declines as the number of unit produced increase(due to increasing returns to scale) over the relevant output range.

C. False, Because in oligopoly market there are few no. Of seller and any oligoplist having a large average portion of market share without doing any advertisement is not possible. Advertisement is being done by oligopolist to increase his revenue.

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