Which of the following attributes is generally present in a perfectly competitive market?
Companies can enter or exit the market freely
A perfectly competitive market has a very large number of buyers and sellers, a homogeneous (identical) product, perfect knowledge, and free entry and exit of firms.
Because of free entry and exit, firms earn only normal profit in the long run.
Each firm is a price taker: the price is set by market demand and supply, not by the individual firm's cost. Supply controlled by a few firms describes an oligopoly, and slightly differentiated products describe monopolistic competition.
Hence, the attribute present in perfect competition is that companies can enter or exit the market freely.
Important Questions from Markets
Under the oligopoly market, according to __________, each producer can always lower the price until the price becomes equal to the cost of production.
Because of price rigidity, firms under oligopoly face a ____ demand curve.
______ may be defined as a market situation in which market price is largely determined by the forces of total demand and total supply in the market.
Under ____ the cross elasticity of demand between the product of the firm and that of other commodity in the market is zero.
State one limitation of the operation of a supermarket.
