Question

Which of the following is/are the features of perfect competition?
(i) Large number of buyers and sellers
(ii) Freedom of entry and exit
(iii) Perfect mobility of resources
(iv) Homogeneous product

• A. (i), (ii) & (iii)
• B. (ii), (iii) & (iv)
• C. (i), (iii) & (iv)
• D. (i), (ii), (iii) & (iv)

Answer 1

The correct option is D (i), (ii), (iii) & (iv)

Perfect competition is a type of market where there are large number of buyers and sellers who deals in homogeneous product due to which no individual unit is able to influence the price of the product and the firms have to quote the price that prevails in the market.

There is freedom of mobility of the resources as well as entry and exit of the firms from the competition.