What are the economic assumptions for a perfectly competitive market?

There are four fundamental assumptions which must all be satisfied:
There must be many buyers and sellers in the market and they all have to be price takers. That is to say, none of them are large enough to affect the market price.There are no barriers to entry or exit.Buyers and sellers have perfect information of prices such that there are no asymmetric information in the market. All firms produce a homogeneous product

PW
Answered by Peter W. Economics tutor

1797 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Analyse three consequences of high inflation on individuals in the UK


What is GDP and is it a useful indicator to measure the standard of living?


Explain what is meant when it is said that there are inefficiencies in the production of goods and the allocation of resources.


Explain how government spending can lead to an increase in economic growth


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning