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

1763 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What is the best market structure?


State and explain all of the factors which can shift the demand curve of a product


Explain the meaning of opportunity cost?


How can a fall in interest rates affect the Aggregate Demand of an economy


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