Question

What is pure competition?

Question 18 options:

A theoretical market structure with very large numbers, identical products and freedom of entry and exit.


A theoretical market structure with very large numbers, identical products, freedom of entry and exit, and perfect knowledge by all buyers and sellers of market conditions


A theoretical market structure with very large numbers and identical products.

Answer 1

Answer:

A theoretical market structure with very large numbers, identical products, freedom of entry and exit, and perfect knowledge by all buyers and sellers of market conditions

Explanation:

Pure or perfect competition is a theoretical market structure that meets the following criteria.

1. All traders sell identical products-(homogeneous)
2. Traders cannot influence the market price.
3. Traders can enter and exit the market at no cost.
4. Buyers have complete information about the current prices that each buyer charges.
5. Resources such as labor move freely within the industry.

Answer 2

Answer:

The answer is B. The second option.