Questions and Answers
What is a perfectly competitive market?
A market with many sellers and buyers of a homogeneous product and no barriers to entry
What is the defining characteristic of a perfectly competitive market?
Homogeneous product
What is the short-run supply curve for a perfectly competitive firm?
The portion of the marginal cost curve that lies above the average variable cost curve
What is the long-run supply curve for an increasing-cost industry?
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What happens in the long run if there is an increase in demand in a perfectly competitive market?
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In a perfectly competitive market, what is the defining characteristic of the product being sold?
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What is the primary factor that distinguishes a perfectly competitive market from other market structures?
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What is the typical number of firms in a perfectly competitive market?
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What is the key characteristic of the entry into a perfectly competitive market?
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What is the impact of economic profit in the long run for firms in a perfectly competitive market?
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