A market is said to be perfectly-competitive when
A)there is no opportunity costs incurred by the vendor nor by the buyer.
B)the market may be dominated by one or two major companies, but there are many smaller companies also in the market.
C)there is a homogeneous product, equivalent buying and selling prices, and no individual buyers or sellers can affect those prices by their own actions.
D)there are any number of products, equivalent buying and selling prices, and individual buyers or sellers can affect those prices by their own actions.
E)there are any number of products, equivalent buying and selling prices, and individual buyers or sellers can affect those prices by their own actions, but there are no opportunity costs for buyers or sellers.

Question

Quizplus · Accepted Answer

A perfectly-competitive market is characterized by a homogeneous product, equivalent buying and selling prices, and no individual buyers or sellers can affect those prices by their own actions. Option A is incorrect because opportunity costs are always present in any transaction. Option B is incorrect because domination by one or two companies is not consistent with perfect competition. Option D is incorrect because the availability of any number of products is not a requirement for perfect competition. Option E is incorrect because opportunity costs are always present in any transaction.

A Market Is Said to Be Perfectly-Competitive When