Perfect competition can only exist in industries with a large number of firms.

Question

Quizplus · Accepted Answer

Perfect competition requires a large number of firms, each producing a homogenous product, with no barriers to entry or exit, and perfect information. This ensures that no individual firm has market power to influence price or output. Perfect competition requires a large number of firms to prevent any individual firm from having market power and the ability to influence prices. With a large enough number of firms, no one firm can affect the market price and all firms must accept the market price as given.

Perfect Competition Can Only Exist in Industries with a Large