Perfect information is a necessary condition of perfect competition.

Question

Quizplus · Accepted Answer

Perfect information means that all market participants have access to the same information regarding prices, quality, and other market factors. This allows for rational decision making and prevents any one participant from having an unfair advantage. Without perfect information, some participants may have an information advantage that allows them to gain an upper hand and compete less fairly, which is not consistent with the principles of perfect competition.

Perfect Information Is a Necessary Condition of Perfect Competition