The model of perfect competition assumes that:
A)there is information asymmetry in the market.
B)individual suppliers face a downward sloping demand curve.
C)all goods in that market are homogeneous.
D)there are a small number of sellers in the market.

Question

Quizplus · Accepted Answer

The model of perfect competition assumes that all goods in the market are homogeneous, meaning they are identical in nature and there are no variations in quality or features. This assumption allows for perfect substitutability among different suppliers and buyers, making it easier to achieve the theoretical outcomes of perfect competition. The other choices are incorrect as information symmetry is assumed to be present in perfect competition, individual suppliers face a horizontal demand curve, and there are a large number of sellers in the market.

The Model of Perfect Competition Assumes That