Question

In a perfect competition, there are ____ buyers and sellers of products, and there is ____ entry and exit in the market.

Answer 1

In a perfect competition, there are many buyers and sellers of products, and there is free entry and exit in the market.

Step-by-step explanation:

Perfect competition is a model of economics in which no player alone can influence a product's market price.

Perfect competition means that all players in the market have perfect information, that is, know everything about everyone. For example, the condition and price of the goods.

Perfect competition requires that the product is homogeneous. The customer should be able to find similar goods, such as strawberries, at many sellers. The price of the product is not regulated by an individual producer or consumer but instead it is the supply and demand that controls the sales. In places such as malls and squares where the sales outlets are close, conditions can prevail that closely approximate perfect competition.

However, perfect competition is never achieved, which is due, among other things, to market failures, conditions that prevent the pricing mechanism from setting proper prices. Perfect competition means, paradoxically, that there is a total lack of direct competition between the players. The players do not compete with each other, but only adapt to the major changes that are happening in the market. The value of the model lies in the fact that it enables calculations for actual economic conditions, such as how the use of resources should be most effective.

Answer 2

In a perfect competition, there are large number of buyers and sellers of products, and there is free entry and exit in the market.

Perfect competition is a theory whereby market structure exhibits the following: it has a large number of buyers and seller of products, all of them sell an identical product, the firms can freely entry and exit in the market, none of them can influence the price of products, as it is decided by the forces of demand and supply, and each of them earns an average profit; consumers are aware of what's going on in the market, and their decisions thereof are rational, all the factors of production move freely in the market (They aren't hindered by any market factors or market forces), there's no advertising and transportation cost and there's no government intervention.

All of these are characteristics that makeup of a competitive market that it's at its optimum level, that is to say, it's perfect. Nowadays, the concept is still hypothetical, although it is used to compare the forms of market structure.