Question

Which of the following refers to Perfect Competition?
i.There are restrictions on buyers and sellers
ii.There are no restrictions on movement of goods
iii.There are no restrictions on factors of production

• A. Only (i) and (ii)
• B. Only (ii) and (iii)
• C. Only (i) and (iii)
• D. Only (i)

Answer 1

The correct option is B Only (ii) and (iii)

The following characteristics are essential for the existence of Perfect Competition:

• Large Number of Buyers and Sellers
• Homogeneity of the Product
• Free Entry and Exit of Firms
• Perfect Knowledge of the Market
• Perfect Mobility of the Factors of Production and Goods
• Absence of transportation cost