One of the important features of perfect competition is _____?

A. Adequate knowledge of existing prices
B. The influence on prices by individual economic units
C. The restriction in terms of movement of goods and services
D. The administration of a centralized price system

Correct Answer:

Option A = Adequate knowledge of existing prices

Explanation

A perfectly competition has the following characteristics:

• There are many buyers and sellers in the market.
• Each company makes a similar product.
• Buyers and sellers have access to perfect information about price.
• There are no transaction costs.
• There are no barriers to entry into or exit from the market.