Which of the following items apply to perfect competition (choose 3)? a) high barriers to entering the market
b) some barriers to entering the market
c) firms are price setters
d) identical products
e) no barriers to entering the market
f) firms are price takers
g) firms are price searchers

The correct answers are D, E and F. In a perfect competition system, identical products are offered, there are no barriers to entering the market, and firms are price takers.

Explanation:

Perfect competition is a theoretical (a non possible hypothesis) situation of a market in which there is an ideal competitive situation among all the agents that make up the offer: the same product or service with identical conditions is offered by all sellers, who enter the market without major restrictions and cannot determine the price by no means, but this is purely and exclusively determined by the free play of supply and demand. Thus, none of the bidders can influence in any way the willingness to consume of the buyers, who decide based exclusively on non-market issues.

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20

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