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Perfect competition

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Discuss perfect competition and long-run equilibrium. Provide detailed descriptions, definitions and concrete examples of your findings. Additionally, how does the proliferation of global trade and competition contribute to markets moving more away from market-possessing power to more perfect competition? Lastly, when does marginal social benefit equal marginal social cost and why?

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Perfect competition

Discuss perfect competition and long-run equilibrium. Provide detailed descriptions, definitions and concrete examples of your findings. Additionally, how does the proliferation of global trade and competition contribute to markets moving more away from market-possessing power to more perfect competition?
Perfect competition describes markets in which no firm is large enough to set the price of the product. The product in a perfect competition is homogeneous. There are several condition for perfect competition. The transactions costs are not there and there is perfect information about prices. In addition, in the long run the factors of production are assumed to be mobile. There are no barriers, either to entry or to exist. There is a very large number of buyers and sellers. On the supply side ...

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Economics and management

13. If an oligopolistic firm decides to raise its price.
A. other firms will automatically follow
B. none of the other firms will follow
c. other firms may follow if it is the price leader
D. only some of the firms will follow

14. The main difference between perfect competition and monopolistic competition is
A. the number of sellers in the market
B. the ease of exit from the market
C. the degree of information about the market price
D. the degree of product differentiation

15. Prices under an ideal cartel situation will be equal to
A. monopoly prices
B. competitive prices
C. prices under monopolistic competition
D. marginal cost

16. Price discrimination exists when
A. two different sellers charge different prices for the same product
B. one company sells identical products in different markets at different prices
C. the ratio of price to marginal cost differs for similar products
D. both B and C

17. If a product which costs $8 is sold at $10, the mark-up is
A. $2
B. 25%
C. 20%
D. none of the above

18. In finance, risk is most commonly measured by
A. the probability distribution
b. the standard deviation
C. the average deviation
D. the square root of the standard deviation

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