Which of the following is characteristic of a perfectly competitive market?
A)Long-run economic profit.
B)High barriers to entry.
C)Identical products.
D)A small number of firms.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, all firms sell the same product, so there is no differentiation between them. This means that consumers are indifferent between buying from one firm or another, and there are no brand loyalties or other factors that might influence purchasing decisions. This is one of the key characteristics of a perfectly competitive market, so choice (C) is the correct answer.

Choices (A) and (D) are incorrect because long-run economic profit is not possible in a perfectly competitive market, and there are a large number of firms rather than a small number. Choice (B) is incorrect because there are no barriers to entry in a perfectly competitive market - new firms can enter or exit the market freely.

Which of the Following Is Characteristic of a Perfectly Competitive