Exam 3

Question 1

Market Structure

Answer 1

1. Competition in the market is determined by the number of firms
2. Degree of product uniformity (how similar is your product compared to another firm in the same market)
3. Ease of entry and exit into and out of the market
4. Forms of competition

Question 2

Definition of Perfect Competition

Answer 2

1. Many firms (and buyers)
2. Products are very uniform
3. Free entry and exit
4. Competition mainly via pricing