ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In economic theory, perfect competition occurs when all companies sell identical products, market share does not influence price, companies are able to enter or exit without barriers, buyers have perfect or full information, and companies cannot determine prices.

Detailed explanation-2: -Although such high entry and exit costs are standard in many markets, in perfectly competitive markets firms do not face costs to either enter or exit a market. Perfectly competitive firms are free to enter an industry if there is a potential for profit, or to exit the industry in the event of losses.

Detailed explanation-3: -The fundamental condition of perfect competition is that there must be a large number of sellers or firms. Homogeneous Commodity is the second fundamental condition of a perfect market. The products of all firms in the industry are homogeneous and identical. Was this answer helpful?

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.

Detailed explanation-5: -Answer and Explanation: The correct option is (c) Each firm chooses the price it wants to sell. Since there are large number of sellers in the market, any change in supply by the sellers can not influence the market price.