Post Utme Pan Atlantic University 2023 Commerce Question 26

Practice objective / multiple choice question 26 from the 2023 Post Utme Pan Atlantic University Commerce examination.

Post Utme Pan Atlantic University 2023 Commerce Objective / Multiple Choice
Question 26 POST_UTME_PAN-ATLANTIC_UNIVERSITY • 2023 • COMMERCE • objective

In a perfectly competitive market, the law of one price dictates that the price of a commodity will be equal to the opportunity cost of producing it. However, this law is often violated due to market failures such as asymmetric information. Which of the following is a consequence of this market failure?

Answer Options

A. Price ceilings are implemented to prevent price gouging
B. Firms engage in price wars to undercut each other
Correct Answer C. The market equilibrium price is distorted due to asymmetric information
D. The government intervenes to correct market failures
Correct Answer
C
Correct Option:
The market equilibrium price is distorted due to asymmetric information

About This Question

This is Post Utme Pan Atlantic University 2023 Commerce Question 26. It is one of the objective questions from the 2023 Post Utme Pan Atlantic University Commerce examination.

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