Multiple Choice Questions on Assertion A There is no restriction on the entry and exit of the firms in the perfect competiti........... for Common University Entrance Test (CUET) Preparation

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Multiple Choice Questions

Assertion A There is no restriction on the entry and exit of the firms in the perfect competiti...........

Economics (CUET) Theory of firm under perfect Competition
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    Assertion (A): There is no restriction on the entry and exit of the firms in the perfect competitive market.

    Reason (R): The perfect competition market is characterised by the sellers being a price taker and not a price maker.

     

    Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).
     

    Incorrect Answer

    Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).
     

    Correct Answer

    Assertion (A) is true, but Reason (R) is false.
     

    Incorrect Answer

    Assertion (A) is false, but Reason (R) is true.

    Incorrect Answer
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    Explanation:

    Option (2) is correct.
    Explanation: In the perfect competition, there is no restriction on entry and exit of firms. Firms enter the market by getting attracted towards profit and they leave the market when
    the existing firms bear losses

    By: Parvesh Mehta
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