Question

Which of the following descriptions is NOT one of the key assumptions of a
perfectly competitive market?
(A) The firm has perfect information about the market in which it operates.
(B) Products provided by the sellers are homogeneous.
(C) There is no barrier to exit the market, whether you are a buyer or a seller.
(D) Some big firms are able to influence market equilibrium price by making an
individual decision.

Answer 1

Answer :-

Option D is correct.

Some big firms are able to influence market equilibrium price by making an individual choice is not the key assumption of perfect competition market .

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→ This is because in perfect competition market the firms are price taker not price maker.

→ All the the forms in a perfect competition market sales homogeneous product so if any with form try to dominate the equilibrium price then the buyers will definitely not purchase anything from that only firm .

→ So in perfect competition market we can sell whatever amount of goods you want to sell at that particular fixed point of price.

→ And even the buyers can also not influence the equilibrium price .