3570EconomicsMedium
Which of the following is not a basic assumption of perfect competition?
AHomogeneous product
BPerfect information
CFree entry and exit
DMany small sellers and buyers
Correct answer
B. Perfect information
Explanation
Perfect competition assumes many buyers and sellers, free market entry and exit, and homogeneous products. However, perfect information is a strong assumption, and in real markets, information asymmetry often exists.