Which of the following is true of pure competition?
A)It is a market structure with very few sellers.
B)It presupposes a market condition where start-up costs are high for sellers.
C)It is a market structure with very few buyers.
D)It presupposes a market condition where sellers produce homogenous products.

Question

Quizplus · Accepted Answer

Pure competition presupposes a market condition where sellers produce homogenous products, meaning they are identical or nearly identical in terms of quality, features, and price. Pure competition also involves a large number of sellers and buyers, easy entry and exit into the market, and no single seller having significant market power. Start-up costs may be low in pure competition as small firms can easily enter the market.

Which of the Following Is True of Pure Competition