anagerial Eco Test: Final Exam This Question: 1 pt 24 of 37 (8 complete) A large
ID: 1119371 • Letter: A
Question
anagerial Eco Test: Final Exam This Question: 1 pt 24 of 37 (8 complete) A large city has nearly 500 restaurants, with new ones entering regularly as the population grows Which characteristics of this market are consistent with perfect competition and which are not? Is your answer Which of the following characteristics are consistent with perfect competition? (Check all that apply A. A market with 500 restaurants. B. New restaurants regularly entering C. An active city government D. A limited number of restaurant licenses. E. A growing population. This market is 0 A, unlikely to be nearly competitive with differentiated food. O B. likely to be nearly competitive with the licensing barrier to entry ° C. likely to be nearly competitive with a downward-sloping demand curve. O D. likely to be nearly competitive with no known transaction costs 0 E. unlikely to be nearly competitive with many consumers. Click to select your answer 40 RC 3 5 6 78 90 E R TExplanation / Answer
A perfectly competitive market is that kind of market where there exist large numbers of buyers and sellers, homogenous products and normal profit in long run. Firms are price taker and industry is price maker.
The following characteristics match with perfect competition:
A; 500 sellers as 500 is a big number and in perfectcompetition large number of sellers exist.
B:new restruants regularly entreing because entry ad exit has no barrier in such market
E: Growing population as it includes large number of byers as well.
As it is provided that few number of restruant licenses are presence hence the market could be likely competitive with licensing barrier to entry.
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