Which of the following is characteristic of a perfectly competitive market?
A)Differentiated products.
B)Price below marginal revenue.
C)A large number of firms.
D)Significant barriers to entry.

Question

Quizplus · Accepted Answer

A perfectly competitive market is characterized by a large number of firms, all producing homogeneous (identical) products, with no barriers to entry or exit. In such a market, no individual firm has market power to influence the price, which is determined by the forces of supply and demand. Price equals marginal revenue, meaning that firms are price takers and must accept the prevailing market price. Differentiated products and significant barriers to entry are not characteristics of a perfectly competitive market.

Which of the Following Is Characteristic of a Perfectly Competitive