In a market with perfect competition
A) price is set by supply and demand.
B) there are very few sellers.
C) products have very few similarities.
D) firms are relatively large.
E) the buyers and sellers do not know the price structure of the other party.

Question

Quizplus · Accepted Answer

In perfect competition, price is determined by the market forces of supply and demand. The large number of buyers and sellers ensures that no single entity can influence the price. Therefore, choice A is the correct answer. The other options do not describe the characteristics of a perfectly competitive market.

In a Market with Perfect Competition