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Question
Which one of the following is NOT found in a perfectly competition market?
Options
Perfectly knowledge about the prevailing prices.
A large number of buyers and sellers.
Free entry into or exit from the industry.
Advertising by individual firms.
Solution
Advertising by individual firms.
Explanation:
In an entirely competitive marketplace, firms do not advertise since their products are homogeneous and there is no need to separate one from the other. Also, consumers are well aware of the products and costs; thus, advertising would be useless and ineffective.
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RELATED QUESTIONS
'A few big sellers' is a characteristic of ______.
Match the following:
| Column I | Column II | ||
| A. | Monopoly | (i) | Availability of close substitutes |
| B. | Oligopoly | (ii) | Absence of close substitutes |
| C. | Perfect competition | (iii) | Few large sellers |
| D. | Monopolistic competition | (iv) | Homogeneous products |
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