In perfectly competitive input markets
A)all units of the same input command the same price
B)there may be cases when there's only one seller
C)not all information is known by all parties
D)some units of input might be slightly different from others

Question

Quizplus · Accepted Answer

In a perfectly competitive input market, all units of the same input should command the same price because there are many sellers and buyers, and no individual seller or buyer has the market power to influence the price. Therefore, the market price is determined by the supply and demand conditions of the input. Option B is not true because in a perfectly competitive market, there are many sellers, not just one. Option C is not true because all parties have access to the same information in a perfectly competitive market. Option D is also not true because all units of the same input should be identical in a perfectly competitive market.

In Perfectly Competitive Input Markets