Eco chp 5.1

According to Augustin Cournot, what defines a market?

• Price here equalize quickly

• A physical place where goods are exchanged

• A group of buyers only

• A shop or store in a local area

What is a good example of a national market?

• Farmers selling vegetables in their village

• Tata Motors selling cars across India

• Apple selling iPhones globally

• Selling mangoes in a roadside stall

What happens in a long period market?

• Only prices change

• Market allows for changes in technology, preferences, and production methods

• Firms can change all production factors like machines and factories

• None

Perfect competition exists when

• Buyers are forced to buy from one seller

• Sellers can sell anything at any price

• The demand for each producer’s output is perfectly inelastic

• The demand for each producer’s output is perfectly elastic

In a perfectly competitive market, how is the price determined?

• By demand and supply forces

• By individual seller

• By the government regulations

• By advertising strategies

What is assumed about transport costs in perfect competition?

• Transport cost is high

• Transport cost is low

• No transport cost

• Idk

What is the role of government in perfect competition?

• Full control over prices and firms

• Regulates only large firms

• Heavy taxes and subsidies

• No interference

What is the equilibrium price?

• The highest price sellers want

• The lowest price buyers offer

• The average of all prices in the market

• The price where demand equals supply

Who compared the interaction of demand and supply to cutting cloth with scissors?

• Adam Smith

• Alfred Marshall

• Joan Robinson

• Augustin Cournot

On the diagram, what does the intersection point of demand and supply curves represent?

• Maximum Price

• Minimum Price

• Equilibrium Price

• All of the above