Which of the following is characteristic of a perfectly competitive market?

Question

Quizplus · Accepted Answer

In a perfectly competitive market, there are many small firms, and there is free entry and exit. This keeps profits at a level where there is no economic profit in the long run, meaning firms are only covering their costs and not making any additional profit. Option A is incorrect because a small number of firms would indicate an oligopoly or monopoly. Option B is incorrect because in a perfectly competitive market, there is no advantage for large firms to push out small firms since there are no barriers to entry, and small firms can enter the market at any time.

Which of the Following Is Characteristic of a Perfectly Competitive