Question

State with reasons whether you agree or disagree with the following statement:

Large number of buyers and sellers is the only feature of perfect competition.

पर्याय

• Agree

• Disagree

Answer 1

I Disagree with this statement.

Reasons:

The following are some of the features of perfect competition:

1. Homogeneous product: A homogeneous product is one that every company manufactures and sells in perfect competition; that is, each company's units of a commodity are identical in terms of size, shape, colour, quality, etc. As a result, the goods that are offered in a perfect market are exact replicas of one another.
2. Free entry and free exit: In a market with perfect competition, any company is free to enter or leave without any limitations. If there is a good chance for profit, a new company can get into the market with ease. Similarly, the current company is allowed to leave the market if there is a chance of losses.
3. Single price: In a market with perfect competition, the equilibrium of supply and demand determines the uniform price of all units of a commodity offered by various vendors.

Other characteristics of perfect competition include perfect market knowledge, perfect mobility of the factors of production, no government involvement, and no transportation costs. Therefore, perfect competition has more characteristics than just a huge number of customers and suppliers.