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
D All sellers and buyers are honest

Correct Answer: Many buyers and many sellers

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.
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Related Questions

The prize competition was 'touted' as a showcase for new technology, but instead the competition was marred by disqualifications and disputes. The quotation word can be best substituted with which of the following words?
A conceived
B heralded
C disappointing
D promising
"The prize competition was "touted"as a showcase for new technology, but instead the competition was marred by disqualifications and disputes." The underlined word can be best substituted with which of the following words?
A conceived
B heralded
C disappointing
D promising
Aside from many sellers and many buyers, which one is a characteristic of perfect competition?
A Homogeneous product
B Free market entry and exit
C Perfect information and absence of all economic friction
D All of the above
Which of the following is NOT a characteristic of perfect competition?
A Free entry and exit of the firms
B The demand curve of firm is horizontal
C The marginal revenue curve is horizontal
D An individual firm can influence the price
Which of the following is not a feature of perfect competition?
A Large number of buyers and sellers
B Small number of buyers and sellers
C Free entry and exit
D Goods is homogeneous
“Under conditions of perfect competition, the price at which any given product will be supplied and purchased is the price that will result in the supply and the demand being equal.” This statement is known as the:
A Law of diminishing return
B Law of supply
C Law of demand
D Law of supply and demand
What is the opposite of perfect competition?
A Monopsony
B Oligopoly
C Oligopsony
D Monopoly
What is another term for “perfect competition”?
A Atomistic competition
B No-limit competition
C Free-for-all competition
D Heterogeneous market
A ______ is a market situation where economies of scale are so significant that cost are only minimized when the entire output of an industry is supplied by a single producer so that the supply costs are lower under monopoly that under perfect competition.
A Perfect monopoly
B Bilateral monopoly
C Natural monopoly
D Ordinary monopoly
What is the shape of the demand curve faced by a firm under perfect competition?
A Horizontal
B Vertical
C Positively sloped
D Negatively sloped

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