Question

Assume that the market for chocolates is perfectly competitive.

Which of the following statements would be true in this​ case?

A.

​Jessica, a chocolate​ seller, sometimes sets her price lower or higher than the price at which other sellers sell their chocolates.

B.

Jill starts to produce chocolates​ today, but the addition of her supply into the market does not decrease the market price.

C.

Terry uses soy milk for producing his​ chocolates, while Donna uses almond milk for producing hers.

D.

Pam wants to produce chocolates but she is unable to as Roy controls all the cocoa farms in the region.

Answer 1

Solution:-Option B is correct answer.

B.Jill starts to produce chocolates​ today, but the addition of her supply into the market does not decrease the market price.

Explaination:-Here Assume that the market for chocolates is perfectly competitive in this case true statement is Jill starts to produce chocolates​ today, but the addition of her supply into the market does not decrease the market price.A perfectly competitive market is a hypothetical market where competition is at its greatest possible level. Neo-classical economists argued that perfect competition would produce the best possible outcomes for consumers, and society.Pure or perfect competition is a theoretical market structure in which the following criteria are met: all firms sell an identical product t,he product is a "commodity" or "homogeneous all firms are price takers (they cannot influence the market price of their product); market share has no influence on price; buyers have complete or "perfect" information in the past, present and future about the product being sold and the prices charged by each firm; resources such as labor are perfectly mobile; and firms can enter or exit the market without cost.