Q73
Which of the following is one of the assumptions of perfect competition?
A.
Few buyers and few sellers
B.
Many buyers and few sellers
C.
Many buyers and many sellers
AnswerD.
All sellers and buyers are honest
Answer: Option C
Solution
Answer: Option C
Solution:
Many buyers and many sellers is one of the assumptions of perfect competition. Yes, in a perfectly competitive market, there are many buyers and many sellers. As a consequence, they have no market power and cannot influence the market price. This is an assumption of the model of perfect competition.