Which of the following statements about perfect competition is/are correct?

Firms in this
market type spend considerable amounts of money on advertising to influence customers buying decisions.
If a perfectly competitive firm wishes to increase sales of its product, it must decrease the product's price.
In perfect competition, the product's price always equals the firms marginal revenue.
In perfect competition, firms always maximize profit at the low point of the ATC curve.
In perfect competition, firms maximize profit at the output level where MC = MR.

All statements are true.

Only statements I, II, and III are true.

Only IV is true.

Only statements III and V are true.

None of the statements are true.

Perfect Competition are market forms with : Large no of buyers , homogeneous products , uniform prices - (straight 45° upward line, horizontal MR = AR i.e perfectly elastic demand curve) , perfect knowledge spread , free entry & exit , normal profits in long run .

The above definition makes evident : No selling costs to sell same products at same price having inelastic demand ; Inelastic demand implies infinite demand at prevailing prices & no need to reduce price to increase demand .

And : Product Price AR = MR (due to constant price) , Profit maximisation i.e TR - TC maximisation implies horizontal AR = MR intersect U shaped MC curve ta Equilibrium .