One of the defining characteristics of a perfectly competitive market is
A)a small number of sellers.
B)a large number of buyers and a small number of sellers.
C)a similar product.
D)significant advertising by firms to promote their products.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, there are many buyers and sellers who offer a similar product or service. This means that no single producer or buyer has the power to influence the price - sellers must accept the market price and buyers must pay it. There is no significant advertising by firms in a perfectly competitive market as products are identical, so advertising would not benefit any one firm over another.

One of the Defining Characteristics of a Perfectly Competitive Market