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Which of the following does not characterize perfect competition? Group of answer choices there are so...

Which of the following does not characterize perfect competition?

Group of answer choices

there are so many firms no one firm has the ability to control the market

economic profits cannot be earned in the long-run

competitive firms are price makers

competitive firms sell identical products

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Answer #1

Answer. (c) competitive firms are price makers.

Explanation: First of all read the question carefully. It asks which option is "not" correct. Thus the third option is not correct with respect to perfect competition. This is because in a perfect competition, there are large number of sellers and buyers due to which the quantity to be traded and price to be charged is solely decided by demand and supply forces. Thus everyone in a perfect competitive market acts as a price taker, not price maker. Other options are correct, since there are 0 profits in the long run and each firm sells highly substitutable products.

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