3146EconomicsMedium
The cosmetics industry is not considered by economists to be a good example of perfect competition because?
Athere are many EU and government health controls on cosmetic products
Bfirms spend a large amount of money on advertising
Cprofit margins are very high for both producers and retailers
Dthere are a very large number of firms in the industry
Correct answer
B. firms spend a large amount of money on advertising
Explanation
The correct answer is firms spend a large amount of money on advertising.