An essential characteristic of a perfectly competitive market is that buyers and sellers: A

Economics May 02, 2021

An essential characteristic of a perfectly competitive market is that buyers and sellers: A. have so much competition that they have no ability at all to set their own price. B. have no competition and so must set the market price on their own. C. have so much competition that that they must work together perfectly to set a market price. D. None of these answers are correct.

Expert Solution

Answer

A .

Explanation

A perfectly competitive market is characterized by many buyers and sellers, undifferentiated products, no transaction costs, no barriers to entry and exit, and perfect information about the price of a good. The correct option is A "have so much competition, they have no ability at all to set their own price".

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