Economics 【Reading 16】Sample
Which of the following is a characteristic of perfect competition? A)
| There are no barriers to entry into the market. |
| B)
| The products of different firms are sold at different prices. |
| C)
| There are a few sellers. |
|
The only true statement listed in the question is that, under perfect competition there are no barriers to entry into the market. Each of the other possible answers is not a characteristic of perfect competition. While the competitors can earn positive economic profits in the short-run, they cannot earn long term economic profits due to ease of entry and exit. |