Question

Select which characteristic of a perfectly competitive industry is not met in the examples below. Four fundamental characteristics of a perfectly competitive​ industry:
​(1) there is a large number of buyers and​ sellers, ​
(2) firms in the industry produce and sell a homogeneous​ product,
​(3) information is equally accessible to both buyers and​ sellers, and
​(4) there are insignificant barriers to industry entry or exit.

Even though one firm produces a large portion of the​ industry's total​ output, there are many firms in the​ industry, and their products are indistinguishable. Firms can easily exit and enter the industry. This example violates characteristic number nothing. There are many buyers and sellers in the industry. Consumers have equal information about the prices of​ firms' products, which differ slightly in quality from firm to firm. This example violates characteristic number nothing.

a.Many taxicabs compete in a city. The​ city's government requires all taxicabs to provide identical service.
b.Taxicabs are virtually​ identical, and all drivers must wear a designated uniform.
c.The government also limits the number of taxicab companies that can operate within the​ city's boundaries.
d.This example violates characteristic number nothing.

Answer 1

Answer:

there is a large number of buyers and​ sellers

firms in the industry produce and sell a homogeneous​ product

there are insignificant barriers to industry entry or exit.

Explanation:

A perfect competition is characterised by many buyers and sellers of homogenous goods and services. There are no barriers to entry or exit of firms so firms earn zero economic profit in the long run. Prices are set by the forces of the demand and supply so firms and customers are price takers.

Because one firm has greater output than other firms, it means that the firm has greater market power than other firms so this violates the assumption that there are many firms

If goods are homogenous, it means they are the same in every respect and so must have the same quality. So if products have different quality, they violate the homogeneity assumption.

The government restricts the number of cabs that can operate. This means there are barriers to entry of firms and this violates the "there are insignificant barriers to industry entry or exit" assumption

I hope my answer helps you