Question

Choose the statement about perfect competition that iscorrectA. There can be a small number of firms but each firm produces a variety of products.B.One firm sells a product that is slightly different from the product of a competing firm.C. There are no close substitutes for the goods produced by each firm.D. There is no restriction on the entry of new firms into the industry.

Answer 1

Answer:

D. There is no restriction on the entry of new firms into the industry.

Explanation:

The statement about perfect competition that is correct is there is no restriction on the entry of new firms into the industry. Perfect competition describes a theoretical structure of the market in which competition reaches its highest level. Option A is incorrect because there is no limit to the number of firms. Moreover, each firm produces the same product.