1. Which of the following is NOT a characteristic of a perfectly competitive market?
a. It is difficult for a firm to enter or leave the market.
b. Each firm is a price taker.
c. There are many buyers and sellers in the market.
d. The products sold by the firms in the market are homogeneous.
2. A market failure is a situation in which:
a. the market equilibrium leads to either too many or too few resources going towards producing the good or service.
b. resources are being efficiently allocated, but some companies are forced to shut down.
c. the government must take actions to correct the failures of the market in a particular industry.
d. there is no free entry or exit into an industry.