Perfectly competitive markets are responsive to the demand of consumers.

Question

Quizplus · Accepted Answer

Perfectly competitive markets are characterized by many sellers and buyers, homogeneous products, perfect information, and ease of entry and exit. In such markets, producers have no market power and are price takers, meaning they have to accept the market price. Thus, they are highly responsive to changes in the demand of consumers in order to maximize their profits.

Perfectly Competitive Markets Are Responsive to the Demand of Consumers