GCE Economics 1990 Question 9

Question 9

Market Structures

A perfect market has all the following features except that

  1. A.there are many buyers and few sellers
  2. B.the commodities bought and sold are homogenous
  3. C.there is free entry and exit
  4. D.buyers and sellers have perfect knowledge of the market
  5. E.there is only one ruling price.
Show the answer and explanation

Answer: A (there are many buyers and few sellers)

Explanation

Perfect competition needs many buyers and many sellers, not few sellers.