ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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monopoly
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oligopoly
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perfect competition
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monopolisitic competition
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Detailed explanation-1: -Key Takeaways Perfect competition is an ideal type of market structure where all producers and consumers have full and symmetric information and no transaction costs.
Detailed explanation-2: -Perfectly competitive firms have the least market power (i.e., perfectly competitive firms are price takers), which yields the most efficient outcome. Monopolies have the most market power, which yields the least efficient outcome.
Detailed explanation-3: -The correct sequence of the market structure from most to least competitive is perfect competition, imperfect competition, oligopoly and pure monopoly.
Detailed explanation-4: -Perfect competition is considered to be “perfect” because both allocative and productive efficiency are met at the same time in a long-run equilibrium.