Perfect competition is characterized by:
A)rivalry in advertising.
B)fierce quality competition.
C)the inability of any one firm to influence price.
D)widely recognized brands.

Question

Quizplus · Accepted Answer

Perfect competition is characterized by a large number of buyers and sellers, homogeneous products, perfect information, free entry and exit, and most importantly, the inability of any one firm to influence price. This means that each firm is a price taker and has no control over the market price. Advertising and brand recognition do not play a significant role in perfect competition as products are homogeneous and consumers cannot differentiate between brands. Quality competition may exist but it is not fierce as firms cannot charge a premium for higher quality products in a perfect competition market.

Perfect Competition Is Characterized By