Which of the following best accounts for the eight general forms of market competition in economics?

• A. The classification of markets based on the number of firms, product differentiation, and barriers to entry
• B. The determination of consumer preferences through utility analysis
• C. The measurement of national income using GDP and GNP
• D. The calculation of opportunity cost in production decisions

Answer: (A)

Verified step by step guidance

1. Identify the key characteristics that define different market structures in microeconomics. These typically include the number of firms in the market, the degree of product differentiation, and the presence or absence of barriers to entry.
2. Understand that the eight general forms of market competition arise from different combinations of these characteristics. For example, perfect competition has many firms, identical products, and no barriers to entry, while monopoly has one firm, unique product, and high barriers to entry.
3. Recognize that consumer preferences and utility analysis, while important in microeconomics, do not directly classify market structures but rather explain consumer behavior within those markets.
4. Note that national income measurements like GDP and GNP are macroeconomic concepts and unrelated to market competition classifications.
5. Acknowledge that opportunity cost calculations are decision-making tools in production and resource allocation, not frameworks for categorizing market competition.