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All of the following are true about perfect competition except?

All of the following are true about perfect competition except that A. There is free market entry without large capital costs for entry. B. There are many firms participating in the market. C. In the long run, an increase in profit will have no effect on the number of firms in the market. D. Firms are price takers.

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Question added by Anayatullah Tahir , Finance Manager , Etqan Projects
Date Posted: 2014/04/14
Muhammad Zubair
by Muhammad Zubair , CFO / Chief Accountant , RH Group

C. In the long run, an increase in profit will have no effect on the number of firms in the market. 

Mukkaram Siddique
by Mukkaram Siddique , Finance, Management & Stocks , Amazon Foods Saudi Arabia

According to my knowledge, perfect competition is a situation in which a price initiative by one firm ignites the price war.

Option C seems irrelevant. 

 

Option A suggests open opportunity for everyone 

Option B suggests there are competitors.

Option D suggests they are working on price and it's reduction so are price takers.

gajendra singh
by gajendra singh , ACCOUNTS OFFICER , NK TEMPLES PVT. LTD.

option (c)

 

Srinivas Kotni ACA CMA
by Srinivas Kotni ACA CMA , Finance Controller , Ecolab

Option (C.).

Divyesh Patel
by Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town

A. There is free market entry without large capital costs for entry.

DEBASISH BHATTACHARYA
by DEBASISH BHATTACHARYA , MANAGER , STATE BANK OF INDIA

A

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