Question

Assume that the market for chocolates is perfectly competitive. Which of the following statements would be true in this​ case? A. Jill starts to produce chocolates​ today, but the addition of her supply into the market does not decrease the market price. B. Terry uses soy milk for producing his​ chocolates, while Donna uses almond milk for producing hers. C. ​Jessica, a chocolate​ seller, sometimes sets her price lower or higher than the price at which other sellers sell their chocolates. D. Pam wants to produce chocolates but she is unable to as Roy controls all the cocoa farms in the region.

Answer 1

Answer:  Option A                      

Explanation: In simple words, perfect competition refers to market structure in which there are large number of participants each operating at  small level.

The prices of commodities in such markets are determined by the forces of demand and supply as no individual participant is able to influence the price on his or her own.

Thus, the statement depicting Jill not able to decrease price even after increase ins supply depicts perfect completion.