Characteristics of Purely Competitive Industries Quiz

Homogeneous products distinguish purely competitive industries.

Firms in purely competitive industries are price takers, not setters.

The demand curve for an individual firm in a purely competitive market is horizontal.

In a purely competitive market, price increases if demand goes up.

The demand curve for an individual firm in a purely competitive market remains unchanged with a decrease in market price.

In a purely competitive market, price decreases if a firm reduces its production.

Perfect knowledge among buyers and sellers is a characteristic feature of purely competitive industries.

Perfect mobility of resources is a key condition for a purely competitive market.

Setting price above market equilibrium leads to the inability to sell any units in a purely competitive market.

In the long run, economic profits are zero in a purely competitive market.

The marginal revenue curve in a purely competitive market is horizontal.

In the long run, economic profits decrease to zero in a purely competitive market.

In a purely competitive market, price decreases if individual firms increase production.

Purely competitive markets lack substantial pricing power for individual firms.

In long-run equilibrium, price equals average total cost in a purely competitive market.