Characteristics of Perfect Competition

Very Easy Microeconomics Market Structures

In microeconomics, different market structures have distinct characteristics and outcomes. One of the simplest forms of market structure is known as perfect competition, which is characterized by numerous small firms competing against each other.

Among the following options, which one describes a key characteristic of a perfectly competitive market?

Firms have significant control over the price of their products.

There are many buyers and sellers, and products are homogeneous.

Barriers to entry are high, limiting new firms.

Hint

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