Final answer:
Under perfect competition, firms have perfect information and there are no barriers to entry. However, products are not differentiated and prices are not set by individual firms.
Step-by-step explanation:
a) Firms have perfect information: This is an assumption made under perfect competition. In a perfectly competitive market, both buyers and sellers have access to all relevant information about the market and the products being bought and sold. This means that firms know about the prices, quality, and availability of products in the market.
b) There are no barriers to entry: This is an assumption made under perfect competition. In a perfectly competitive market, there are no barriers that prevent new firms from entering the market or existing firms from leaving the market. This ensures that there is free entry and exit in the industry.
c) Products are differentiated: This is not an assumption made under perfect competition. In perfect competition, products are homogeneous, which means that they are identical or indistinguishable from one another.
d) Prices are set by individual firms: This is not an assumption made under perfect competition. In perfect competition, prices are determined by the interaction of market forces, such as supply and demand. Individual firms in a perfectly competitive market are price takers, meaning they have no control over the prices and must accept the prevailing market price.