Question

what is perfect competition? Explain its main features (6marks)​

Answer 1

Answer:

A perfectly competitive market is characterized by many buyers and sellers, undifferentiated products, no transaction costs, no barriers to entry and exit, and perfect information about the price of a good. The total revenue for a firm in a perfectly competitive market is the product of price and quantity

Answer 2

Perfect competition is the form of the market which has a large number of buyers and sellers.

Explanation:

• The form of the market which has a large number of sellers and buyers is known as perfect competition.
• Under this type of market, consumers have a wide choice. It has competition as the same product is available at different rates and the consumers get to make the final choice.
• Homogenous/ similar products are sold by different sellers. The products are only a bit different in quality so the prices remain unchanged for all the sellers.