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Questions and Answers
In a perfectly competitive market, what is the characteristic of the demand curve faced by a single firm?
In a perfectly competitive market, what is the characteristic of the demand curve faced by a single firm?
- Relatively elastic
- Perfectly elastic (correct)
- Perfectly inelastic
- Relatively inelastic
What is the main characteristic of a monopoly market structure?
What is the main characteristic of a monopoly market structure?
- Many sellers offering identical products
- A single seller with market power (correct)
- No barriers to entry or exit
- Perfect information available to all market participants
What is the main determinant of the price and output level in a monopoly market?
What is the main determinant of the price and output level in a monopoly market?
- Perfectly elastic demand curve
- Number of competitors in the market
- Industry demand curve
- Marginal cost of production (correct)
What does the concept of 'excess capacity' refer to in monopolistic competition?
What does the concept of 'excess capacity' refer to in monopolistic competition?
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In a perfectly competitive market, what is the relationship between marginal revenue and price?
In a perfectly competitive market, what is the relationship between marginal revenue and price?
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What does the law of variable proportions explain about production?
What does the law of variable proportions explain about production?
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