For perfect competition to work there must be ?
Correct answer: E. all of the above
- A. many buyers and sellers
- B. a standard product
- C. free entry and exit
- D. perfect information
- E. all of the above
Explanation
Perfect competition assumes many buyers and sellers, a standardized product, free entry and exit, and perfect information. Since all four conditions are listed, “all of the above” applies.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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