Question

14. Which of the following is a characteristic of a perfectly competitive firm? A Jordon cannot tell which farm the peaches came from because they all look alike. B Donelli's Pizza was voted the best pizza in town by readers of the local newspaper. C People who want to open a bank in Kansas must obtain a charter from the Comptroller of the Currency, and there is a limit on the number of new banks. D Devin's new business software firm is spending a ton of money on research and devel- opment. 15. In the table below, what is the shape of the demand curve that faces John's Tricycle 1,200 1,300 1,400 1,500 1,600 7,500 9,000 10,500 12,000 13,500 A downward sloping B horizontal C vertical D upward sloping 16. A competitive firm facing a price of $15 decides to produce 100 units. If the marginal cost of the last unit is $20, the firm should: A hold production constant. B decrease production C increase production. D The firm should do none of these. 17. Corn is a perfectly competitive commodity. In the market place the demand curve for corn is: A perfectly elastic. B perfectly inelastic. C downward sloping D upward sloping

Answer 1

Ans:

14) Option A

Jordon cannot tell which farm the peaches came from because they all look alike.

Explanation

The key characteristics of perfect competition are

a) Large number of buyers and sellers

b) All firms in the market sell identical products

c) perfectly competitive firms are price takers

d) perfectly competitive firms enjoy freedom of entry into and exit out of the industry.