Perfectly competitive markets are characterised by:

Question

Quizplus · Accepted Answer

Perfectly competitive markets are characterized by a large number of producers and consumers that have no market power, meaning they cannot influence the price of the product or service. This results in a situation where prices are driven purely by supply and demand forces, and no single player can manipulate the market. Strong barriers to entry and exit (B) would be a characteristic of a monopolistic market rather than a perfectly competitive one. Similarly, the presence of many different products (D) is more indicative of a differentiated market rather than a perfectly competitive one. Finally, while firms selling a quality product (C) is desirable, it is not a defining characteristic of a perfectly competitive market.

Perfectly Competitive Markets Are Characterised By