In the context of economics, competition implies that: There is only one seller in the market. The same product is available at a variety of prices. There are multiple independent buyers and sellers in the market. Sellers can influence market prices by creating product shortages.

The following statements contain common errors. Identify and explain each error using the demand-supply graph.    The lockdown has caused shutdown of many local fast food outlets. Assuming that the market for fast food is competitive, there will be increase in demand for fast food leading to higher prices.

A competitive firm can sell any amount if the firm set a price equal to the market price. True or false?

Which of the following products/markets is most consistent with the perfect competition model?     Apple iPhones     a bustling farmers' market     Kellogg's Frosted Flakes     electric utilities     automobiles   2 Adam Smith’s “invisible hand” refers to         The mechanism that moves market price and quantity to equilibrium     The natural tendency of markets to avoid monopolies and ensure competition       The market’s incentive to lower price in order to increase quantity sold         The lack of government role in the free market due to the market’s ability to self-regulate         The tendency of firm’s to seek to merge in order to realize synergies and market dominance 3 A company facing inelastic demand for a product sees an increase in its costs after a worker strike forces a wage increase. What is likely to happen to the price and quantity sold of that product?       Price will fall slightly while…