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Questions
Give two characteristics of perfect competition.
State two characteristics of perfect competition.
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Solution
- There are a very large number of buyers and sellers.
- Products sold by different sellers are homogenous.
- Firms are free to enter or exit the industry (or market).
- Buyers and sellers have perfect knowledge about the market conditions.
Notes
Students should refer to the answer according to their questions.
RELATED QUESTIONS
A monopolist is price maker:
Match the following and select the correct option:
| Column I | Column II | ||
| (i) | Perfect competition | (A) | Differentiated Products |
| (ii) | Monopoly | (B) | Few large firms |
| (iii) | Monopolistic Competition | (C) | Single seller |
| (iv) | Oligopoly | (D) | Homogeneous products |
There is no difference between perfect competition and pure competition.
The market structure which is characterised by a single producer of a commodity and when there are not close substitutes for that commodity:
Give three points of difference between perfect competition and monopoly.
Give an example of monopoly.
Why can a monopolist charge different prices in different markets?
What do you mean by homogeneous products?
What is meant by barriers to entry?
Identify the market form from the following.
Firm is a price maker.
