ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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start-up costs
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government regulation
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technology
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Homogeneous products
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Detailed explanation-1: -In a perfectly competitive market, commodity is homogeneous (identical). Thus, the buyers find no reason to prefer the product of one seller to the product of another.
Detailed explanation-2: -What factors reduce competition in a market? On the supply side, mergers and combinations of companies result in fewer firms competing in a market. Fewer buyers reduce competition on the demand side of the market.
Detailed explanation-3: -In a perfect competition model, there are no monopolies. This kind of structure has a number of key characteristics, including: All firms sell an identical product (the product is a commodity or homogeneous). All firms are price takers (they cannot influence the market price of their products).
Detailed explanation-4: -Perfect competition occurs when there are many sellers, there is easy entry and exiting of firms, products are identical from one seller to another, and sellers are price takers.