Consequence of Perfect Competition

Easy Microeconomics Market Structures

In microeconomics, market structures refer to the characteristics of a market that influence the behavior of firms within it. One type of market structure is perfect competition, which is characterized by many firms producing identical products, where no single firm can influence the market price. Price-taking behavior is a fundamental aspect of this market structure.

Given this context, which of the following statements accurately describes a consequence of perfect competition?

Firms can set prices higher than the market equilibrium price.

Firms can earn long-term economic profits.

Firms cannot influence the market price and must accept the market price.

Hint

Submitted1.8K

Correct1.7K

% Correct97%