Which of the following characteristics relate(s) to perfect competition?
I. An industry is dominated by several large firms.
II. Consumers cannot distinguish one firm's product from another.
III. New firms can easily enter the industry.

Question

Quizplus · Accepted Answer

Perfect competition is characterized by products that are identical across firms, making consumers indifferent between firms based on the product (II), and by the absence of barriers to entry, allowing new firms to enter the industry easily (III).

Which of the Following Characteristics Relate(s) to Perfect Competition