One of the assumptions of perfect market is that the firms should be free to start producing the commodity or to stop production, i.e. there should be no barriers of entry or exit

True

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False

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Solution

The correct option is A
True

True. One of the assumptions of perfect market is that the firms should be free to start producing the commodity or to stop production ie there should be no barriers of entry or exit

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Similar questions

Considering the same demand curve as in exercise 22, now let us allow for free entry and exit of the firms producing commodity X. Also assume the market consists of identical firms producing commodity X. Let the supply curve of a single firm be explained as

q^S_f = 8 + 3p for p ≥ 20

= 0 for 0 ≤ p < 20

(a) What is the significance of p = 20?

(b) At what price will the market for X be in equilibrium? State the reason for your answer.

In the case of perfect competition market, commodity price should not exceed

M C

, if case profits are to be maximised.

Q. There are no barriers in the way of firms leaving or joining industry in a perfectly competitive market. Explain the significance of this feature.

What is the effect of free entry and exit of new firms in the long run to the level of profit under perfect competition?

Explain "perfect knowledge about the markets" feature of perfect competition.

Why are the firms said to be interdependent in an oligopoly market? Explain.

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One of the assumptions of perfect market is that the firms should be free to start producing the commodity or to stop production, i.e. there should be no barriers of entry or exit

The correct option is A True True. One of the assumptions of perfect market is that the firms should be free to start producing the commodity or to stop production ie there should be no barriers of entry or exit

The correct option is A
True

True. One of the assumptions of perfect market is that the firms should be free to start producing the commodity or to stop production ie there should be no barriers of entry or exit