The market structure of perfect competition exists when
A) there are a small number of interdependent firms that constitute the entire market.
B) there is a single producer of a product.
C) there are many producers of differentiated products.
D) there are many producers of a homogeneous product.

Question

Quizplus · Accepted Answer

Perfect competition exists when there are many producers of a homogeneous (identical) product, each with a small market share and no control over price. This means that no individual producer can influence the market price of the product, which is set solely by market forces of supply and demand. There are no significant barriers to entry or exit, and all producers have access to the same technology and resources.

The Market Structure of Perfect Competition Exists When