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

1356 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What factors cause the aggregate demand curve to shift?


How should the UK government go about achieving a balance of payments surplus?


Explain why the price elasticity of demand for two products may vary.


Discuss‘looserfiscalpolicy’and‘supply-sidereforms’ that may be used by governments of Eurozone countries to increase economic growth.


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