Perfect competition is a situation in which
A)Every year,owners are likely to earn economic profits.
B)Every year,owners are likely to earn economic losses.
C)There are many firms and several buyers or sellers have market power.
D)There are many firms and no buyer or seller has market power.

Question

Quizplus · Accepted Answer

Perfect competition requires a large number of firms with no market power, meaning no individual firm can affect the market price. This also means that economic profits or losses are unlikely in the long run, as firms cannot charge higher prices than their competitors without losing market share. Therefore, option D is the correct answer.

Perfect Competition Is a Situation in Which