Question

Which of the following is a clear sign of an imperfectly competitive market?

Options

• Firms are pure price takers with no control over price

• Products of all firms are homogeneous

• There are strong legal or financial barriers to entry

• Buyers have perfect information about all goods

Answer 1

There are strong legal or financial barriers to entry

Explanation: 

Barriers to entry and exit, such as legal or financial obstacles, are one of the main conditions that make a market imperfectly competitive.