Which of following is a key assumption of a perfectly competitive market?

A) Firms can influence market price.
B) Commodities have few sellers.
C) It is difficult for new sellers to enter the market.
D) Each seller has a very small share of the market.
E) none of the above

Question

Vedansh Shrivastava · Accepted Answer

Final Answer : D, Explanation :  A key assumption of a perfectly competitive market is that each seller has a very small share of the market. This means that no individual seller has enough market power to influence the price of the commodity. Options A, B, and C all suggest that there are barriers to entry or a limited number of sellers, which are not assumptions of a perfectly competitive market. Therefore, the correct answer is D.

Which of following is a key assumption of a perfectly competitive market?

A) Firms can influence market price.
B) Commodities have few sellers.
C) It is difficult for new sellers to enter the market.
D) Each seller has a very small share of the market.
E) none of the above

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Learning Objectives

Related questions

Which of following is a key assumption of a perfectly competitive market?A) Firms can influence market price.B) Commodities have few sellers.C) It is difficult for new sellers to enter the market.D) Each seller has a very small share of the market.E) none of the above

Definitions

Learning Objectives

Learning Objectives

Related questions

Which of following is a key assumption of a perfectly competitive market?

A) Firms can influence market price.
B) Commodities have few sellers.
C) It is difficult for new sellers to enter the market.
D) Each seller has a very small share of the market.
E) none of the above