A very large number of small sellers who sell identical products implies
A) a multitude of vastly different selling prices.
B) a downward-sloping demand curve for each seller's product.
C) the inability of one seller to influence price.
D) chaos in the market.

Question

Quizplus · Accepted Answer

When there are a large number of small sellers selling identical products, each seller's output is insignificant compared to the total output of the market, and no single seller can influence the price of the product. Therefore, the price is determined by market forces of demand and supply, and any individual seller has to accept the prevailing market price. It is known as perfect competition. Hence, option C is the correct answer. Option A and B are incorrect because perfect competition implies uniform selling prices, and there is no scope for price discrimination. Option D is incorrect as perfect competition leads to a high degree of market efficiency rather than chaos.

A Very Large Number of Small Sellers Who Sell Identical