Question

Give reason "Single price prevails in perfect competition".

Answer 1

Forms of Market and Price Determination Under Perfect Competition. ... There are many potential sellers selling their commodity in the market. Their number is so large that a single seller cannot influence the market price because each seller sells a small fraction of total market supply.

Answer 2

"Single price prevails in perfect competition". The reason behind this statement can be explained as follows:

Explanation: Perfect competition refers to that form of the market in which there are large number of buyers and sellers selling the homogeneous products at the uniform prices.

Uniform prices: This is the most common and unique feature of the prefect competition in which all the sellers are selling the products at same price as there are homogeneous products. This means that every product is same in all the aspects be it features, functions etc.

Another reason behind the uniformity in prices is that there are large number of buyers and sellers and no individual has this much power that they can affect the price by their individual action.

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