9 min read
This study guide covers perfectly competitive markets, focusing on firm entry and exit. Key concepts include the shutdown rule (P < AVC), short-run vs. long-run decision-making, impacts of profit and loss on market supply, and achieving long-run equilibrium (zero economic profit). It also provides practice questions with graph analysis and scenario application.
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Question 1 of 11
Which of the following is a key characteristic of a perfectly competitive market? 🤔
A single seller dominates the market
High barriers to entry and exit
Firms are price setters
Many sellers competing in the market