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Questions
Explain any four features of perfect competition.
Explain the perfect competition's three characteristics.
Describe any three characteristics of perfect competition.
What are the characteristics of a perfectly competitive market?
Give two characteristics of perfect competition.
Mention one feature of a perfect market.
State two features of perfect competition.
Solution
Characteristics of a Perfectly Competitive Market:
- Large Number of buyers and sellers: The number of buyers and sellers of a commodity is so large that no individual buyer or seller can influence the market price. Accordingly, a firm under perfect competition is only a price taker.
- Homogeneous Products: All sellers sell identical products.
- Free Entry and Exit: A firm can enter or leave the industry anytime. Consequently, only normal profits prevail in the long run.
- Perfect Knowledge: Buyers and sellers have full knowledge regarding the prevailing market price.
Notes
Students should refer to the answer according to their questions.
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