Question 9
Market StructuresA perfect market has all the following features except that
- A.there are many buyers and few sellers
- B.the commodities bought and sold are homogenous
- C.there is free entry and exit
- D.buyers and sellers have perfect knowledge of the market
- 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.