The characteristics that describe a perfectly competitive industry include
A) many firms selling an identical product.
B) one firm selling to many buyers.
C) many firms selling a slightly differentiated product.
D) a few firms selling to many buyers.
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

A perfectly competitive industry requires many firms selling an identical product, meaning that each firm is essentially a price-taker and has no control over the market price.

Answer: E 
 None of the other options accurately describe a perfectly competitive industry. Option B describes a monopoly, Option C describes monopolistic competition, and Option D describes an oligopoly.

The Characteristics That Describe a Perfectly Competitive Industry Include