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According to the source, which four conditions define a perfectly competitive market?
AA single seller, many buyers, secret pricing, and barriers to entry
BDifferentiated products, few sellers, full information, and free entry and exit
CIdentical products, one buyer, incomplete information, and restricted exit
DIdentical products, many buyers and sellers, full information, and free entry and exit
Answer & Solution
Correct answer: D. Identical products, many buyers and sellers, full information, and free entry and exit
1. Exactly four conditions that define perfect competition.
2. They are: many firms producing identical products, many buyers and many sellers, full information for rational decisions, and free entry and exit.
3. A single seller or a single buyer contradicts the 'many buyers and sellers' condition.
4. Barriers to entry directly contradict the free entry and exit condition.
_Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 8 "Perfect Competition", section 8.1 | Perfect Competition and Why It Matters_
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