Which one of the following is not an assumption of the competitive model?
A)Homogenous products
B)Unrestricted mobility of resources
C)Economies of scale
D)Perfect information

Question

Quizplus · Accepted Answer

The assumption of economies of scale is not a part of the competitive model. In fact, the competitive model assumes that firms have constant returns to scale. This means that doubling all inputs would result in a doubling of output, rather than a proportionally larger increase in output.

Which One of the Following Is Not an Assumption of the Competitive