Assertion (A): A firm under perfect competition cannot sell any output above the market price.
Reason (R): Buyers have perfect knowledge and the products are identical.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Both are true.
Knowing every price and seeing no difference in products (R), buyers simply go to another firm if one charges more (A).

Concept: Why a firm cannot charge more
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsFeatures of perfect competition

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Ten questions from Perfect Competition & Supply, at your own pace.

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Ten questions from Perfect Competition & Supply, at your own pace.

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Assertion (A): A firm under perfect competition cannot sell any output above the market price.Reason (R): Buyers have perfect knowledge and the products are identical.

Explanation

Assertion (A): A firm under perfect competition cannot sell any output above the market price.
Reason (R): Buyers have perfect knowledge and the products are identical.