Characteristics of a perfectly competitive market include:
A) the presence of transaction costs.
B) homogenous products.
C) few sellers, each with a large market share.
D) All of these are characteristics of a perfectly competitive market.

Question

Quizplus · Accepted Answer

A perfectly competitive market is characterized by homogenous products, where there are many small firms competing against each other. Transaction costs are minimal and each seller has a small market share. Hence, option B is the correct choice. Option A is incorrect because there are minimal transaction costs in a perfect competition market. Option C is incorrect because there are many sellers in the market, and each has a small market share. Option D is incorrect because only option B is a characteristic of a perfectly competitive market.

Characteristics of a Perfectly Competitive Market Include