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The condition for pure competition is
- a)large number of buyer and seller, free entry and exist
- b)homogenous product
- c)both (a) and (b)
- d)large number of buyer and seller, homogenous product, perfect knowledge about the product
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
The condition for pure competition isa)large number of buyer and selle...
The condition for pure competition includes two main factors: a large number of buyers and sellers, and a homogenous product. Let's discuss these factors in detail:
Large number of buyers and sellers:
- In a pure competitive market, there are many buyers and sellers, none of which have enough market power to influence the price of the product.
- This means that no single buyer or seller can control the market or dictate the price of the product.
- Each buyer and seller is a price taker, meaning they must accept the market price and cannot influence it.
Homogenous product:
- In a pure competitive market, the product being sold is identical across all sellers.
- This means that there is no difference in quality or features between products sold by different sellers.
- As a result, buyers have no reason to prefer one seller over another and will choose the seller offering the lowest price.
In addition to these two factors, pure competition also requires free entry and exit from the market, meaning that new sellers can easily enter the market and existing sellers can easily leave. This ensures that the market remains competitive and no single seller can gain a monopoly.
Overall, pure competition is characterized by a large number of buyers and sellers, a homogenous product, and free entry and exit from the market. These conditions ensure that the market remains competitive and that no single buyer or seller can control the market.
Large number of buyers and sellers:
- In a pure competitive market, there are many buyers and sellers, none of which have enough market power to influence the price of the product.
- This means that no single buyer or seller can control the market or dictate the price of the product.
- Each buyer and seller is a price taker, meaning they must accept the market price and cannot influence it.
Homogenous product:
- In a pure competitive market, the product being sold is identical across all sellers.
- This means that there is no difference in quality or features between products sold by different sellers.
- As a result, buyers have no reason to prefer one seller over another and will choose the seller offering the lowest price.
In addition to these two factors, pure competition also requires free entry and exit from the market, meaning that new sellers can easily enter the market and existing sellers can easily leave. This ensures that the market remains competitive and no single seller can gain a monopoly.
Overall, pure competition is characterized by a large number of buyers and sellers, a homogenous product, and free entry and exit from the market. These conditions ensure that the market remains competitive and that no single buyer or seller can control the market.
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The condition for pure competition isa)large number of buyer and selle...
I think he is talking about short run because firm don't have enough time in short run to enter into market or exit from market
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The condition for pure competition isa)large number of buyer and seller, free entry and existb)homogenous productc)both (a) and (b)d)large number of buyer and seller, homogenous product, perfect knowledge about the productCorrect answer is option 'C'. Can you explain this answer?
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