ECONOMICS (CBSE/UGC NET)

ECONOMICS

COMPETITION AND MARKET STRUCTURES

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which is NOT a characteristic of perfect competition?
A
difficult entry into the market
B
many sellers
C
identical product
D
no control over price
Explanation: 

Detailed explanation-1: -Answer and Explanation: Product differentiation is not a characteristic of perfect competition. Price taking behavior, freedom of entry or exit for buyers, and a large number of buyers and sellers are characteristics of perfect competition.

Detailed explanation-2: -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-3: -Answer and Explanation: The correct option is (a) The ability of firms to control prices. In a perfectly competitive market, the firms and the buyers are the price takers. It means the firms cannot influence the price level by increasing/decreasing the quantity of the goods.

Detailed explanation-4: -Perfectly competitive markets must have the following characteristics: No barriers to entry and exit, no market influencers, homogeneous products, and complete product transparency.

Detailed explanation-5: -Large numbers of buyers and sellers in the market. Free entry and exit of firms in the market. Each firm should be selling a homogeneous product. Buyers and sellers should possess complete knowledge of the market. No price control. More items

There is 1 question to complete.