A perfectly competitive market is a market that meets the conditions of

A. (1) many buyers and sellers, (2) all firms selling identical products, and (3) significant barriers to new firms entering the market.

B. (1) many buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market.

C. (1) many buyers and sellers, (2) all firms selling differentiated products, and (3) no barriers to new firms entering the market.

D. (1) few buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market.

Question

Aliyah Simpson

Business

3 December, 19:09

A perfectly competitive market is a market that meets the conditions of

A. (1) many buyers and sellers, (2) all firms selling identical products, and (3) significant barriers to new firms entering the market.

B. (1) many buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market.

C. (1) many buyers and sellers, (2) all firms selling differentiated products, and (3) no barriers to new firms entering the market.

D. (1) few buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market.

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Answers (1)

Know the Answer?

Elodie · Answer 1

Answer: Option (B) is correct.

Explanation:

Perfect competition market structure is one under which there tends to be several firms, none of which are large enough in order to influence the industry, also all of them produce homogeneous products and services. These firms are known as the price takers. There exist no such barriers to entry or exit in this market.