Practice question · Select all that apply
Which features define perfect competition?
Hints
- Three of these are pillars; one is their exact opposite.
- Free entry is what defines this structure, not restricted entry.
Show the answer
- B. Identical (homogeneous) products
- C. Firms take the market price as given
- D. Many small sellers
Why
Free entry, the absence of barriers, is the fourth pillar; barriers are what create the other structures.
Practise Market Structures
The app has 7 more questions on this lesson, and keeps your place in the course. Business I is free to start.
More questions on Market Structures
- Match each structure to how a firm wins in it.
- A farmer selling wheat and a pharmaceutical firm holding a patent face the same demand curve for their own…
- A price taker in perfect competition faces a horizontal demand curve; a monopolist faces the market’s…
- In monopolistic competition, firms earn large economic profits in the long run.
- Monopolistic competition has many firms like perfect competition, yet each sets its own price. What makes the…
- Sort each barrier to entry by its source.