Under perfect competition, there are: high barriers to entry and no nonprice com
ID: 1133748 • Letter: U
Question
Under perfect competition, there are:
high barriers to entry and no nonprice competition.
no barriers to entry and some advertising and product differentiation.
very high barriers to entry and some advertising and product differentiation.
high barriers to entry and some advertising and product differentiation.
no barriers to entry and no nonprice competition.
high barriers to entry and no nonprice competition.
no barriers to entry and some advertising and product differentiation.
very high barriers to entry and some advertising and product differentiation.
high barriers to entry and some advertising and product differentiation.
no barriers to entry and no nonprice competition.
Explanation / Answer
The answer is option (E).
(E) A perfect competition there are large number of buyers and sellers in the market, and the products are homogeneous in nature. So if a seller tries to rise the price of his good, he will loose all his customers and there are perfect substitute available. Hence there are no barriers to entry and non price competition.
Here price is equal to the marginal cost of production.
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