What are the economic assumptions for a perfectly competitive market?

There are four fundamental assumptions which must all be satisfied:
There must be many buyers and sellers in the market and they all have to be price takers. That is to say, none of them are large enough to affect the market price.There are no barriers to entry or exit.Buyers and sellers have perfect information of prices such that there are no asymmetric information in the market. All firms produce a homogeneous product

Answered by Peter W. Economics tutor

1406 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Explain the impacts of a fall in interest rates on the rate of GDP growth of a country.


If mpc = 0.6, what will be the final change in National Income arising from an initial increase in Investment of £200m?


What is the Price Elasticity of Demand?


Explain two reasons for an outward shift in the supply curve


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo
Cookie Preferences