Do you understand perfect competition?

This quiz tests your knowledge of market structures examining the area of perfect competition

published on March 09, 2011120 responses 1 2.0★ / 5

We assume that perfectly competitive firms produce

Select the one correct answers
various products
a homogenous product

There is free exit and entry into a perfectly competitive industry

True
False

Perfectly competitive firms sell products based on the equilibrium market price. As a result of this, what are they known as?

If a perfectly competitive firm is making a loss in the short run it should continue to operate if:

average revenue < average variable cost
average revenue > average variable cost

True or false, in a perfectly competitive industry, resources are allocated efficiently among firms?