ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Differentiated Products
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Identical Products
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Small Number of Sellers
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Large Number of Sellers
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Well Informed Buyers
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Detailed explanation-1: -A Large and Homogeneous Market. There are a large number of buyers and sellers in a perfectly competitive market. Perfect Information Availability. Absence of Controls. Cheap and Efficient Transportation. Supermarkets. Knockoffs. Technology.
Detailed explanation-2: -The three primary characteristics of perfect competition are (1) no company holds a substantial market share, (2) the industry output is standardized, and (3) there is freedom of entry and exit. The efficient market equilibrium in a perfect competition is where marginal revenue equals marginal cost.
Detailed explanation-3: -(The characteristics of a perfectly competitive firms are: price takers, experience no barriers to entry, sell identical products, and face a perfectly elastic (horizontal) demand curve.)
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