GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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In perfect competition, there is a process of
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Free entry and free exit of the firms
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Semi-free exit but absolute free entry
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Restricted entry and exit of the firms
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Free entry but restricted exit of the firms
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Explanation:
Detailed explanation-1: -Sellers and buyers have all relevant information to make rational decisions about the product being bought and sold. Firms can enter and leave the market without any restrictions-in other words, there is free entry and exit into and out of the market.
Detailed explanation-2: -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.
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