Statistics Help
Question: Which of the following is not an assumption that economists make when using the model of perfect competition?
Which of the following is not an assumption that economists make when using the model of perfect competition?
Firms seek to maximize profits.
The products of each firm in a particular market are identical.
Each firm sets its price equal to its average total cost.
There is easy entry and exit. Edit
Answer: Each firm sets its price equal to its average total cost.
Firms are price takers, not price makers. Hence, they cannot set the price. Edit
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