CFA Practice Question

CFA Practice Question

A market exhibiting signs of perfect competition is characterized by:
A. A large number of firms producing identical products with low barriers to entry.
B. A large number of firms producing identical products with high barriers to entry.
C. A small number of firms producing identical products with high barriers to entry.
Explanation: Perfect competition: large number of firms, identical products, no barriers to entry/exit.

User Contributed Comments 4

User Comment
OmarDK How can output expand in the short run if we are already at full employment?
nike by working overtime, etc. however the output expansion cannot be sustained.
sarath adaptive mean non-anticipated ....implies that people will take time to react and eventually adapt...
cwest020 full employment means 95% not 100, so output can still increase in the short run
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