Perfect Competition

Perfect competition is characterized by

• a large number of sellers and buyers.
• diverse products.
• sellers acting together to set prices.
• uninformed buyers and sellers.

Under perfect competition,

• products are similar but not identical.
• numerous restrictions prevent firms from entering the market.
• no seller can sell a product above the prevailing market price.
• a single seller can affect price.

Which market has no competition?

• perfect competition

• oligopoly

• imperfect competition

• monopolistic competition

A perfect competitive firm charges a price that is ____________.

• different to other firms

• higher than other firms

• lower than other firms

• similar to other firms

Which of the following is not a characteristic for perfect competition?

• No barriers to entry and exit

• Large firms

• Perfect Information

• Homogenous product

In perfect competition, restrictions on entry into an industry

• apply to labor but not to capital

• do not exist

• apply to both capital and labor

• apply to capital but not to labor

The demand curve for a perfectly competitive firm is:

• perfectly inelastic.
• perfectly elastic.
• downward sloping.
• relatively but not perfectly elastic.