For an industry to be perfectly competitive, what must exist? A) there are no competitive markets B) many firms selling identical items C) many firms selling different items D) many consumers wanting different items

Question

Denzel Howe

Social Studies

16 October, 09:15

For an industry to be perfectly competitive, what must exist? A) there are no competitive markets B) many firms selling identical items C) many firms selling different items D) many consumers wanting different items

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Answers (2)

Know the Answer?

Joanna Ward · Answer 1

(B) many firms selling identical items.

Moises Huerta · Answer 2

Market conditions with perfect competition tend to have to accept the equilibrium price at which it sells goods. This is because there are many firms selling identical products, it is easy to exit and enter the market, thus creating an option for the consumers to easily switch between products if one firm is commanding too high a price for a product.

Thus, from the options provided in the question, the correct one to exist in a perfectly competitive firm would be (B) many firms selling identical items.