Micro

Forms of Market

Easy

Which of the following is not a feature of perfect competition?

The market consists of a large number of buyers and sellers

The product of one firm can be differentiated from the product of other firms.

Entry into the market as well as exit from the market are free for firms.

perfect information

✅ Correct Option: 2

Option 1 -> Large number of buyers and sellers is a key feature of perfect competition.

Option 2 -> Product differentiation is NOT a feature of perfect competition; products must be homogeneous (identical).

Option 3 -> Free entry and exit is a fundamental characteristic of perfect competition.

Option 4 -> Perfect information is an essential feature of perfect competition.

Hence, Option 2 -> In perfect competition, all firms sell homogeneous or identical products, meaning there is no product differentiation. Buyers view all products as perfect substitutes. Product differentiation is actually a characteristic of monopolistic competition, not perfect competition. This homogeneity ensures that no single firm can charge a higher price than others. -> correct

2026: 11 May Shift 2

Under Perfect Competition, Large number of buyers and sellers implies:

2025: 28 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Upper limit on price of goods & services	(I) Leads to excess supply.
(B) Free entry and exit	(II) Equilibrium price = min AC of the firms.
(C) Marginal revenue product of labor (MRP_L)	(III) Leads to excess demand.
(D) Lower limit on price of goods & services	(IV) MR x MP_L.

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)
(A) - (III), (B) - (II), (C) - (IV), (D) - (I)
(A) - (IV), (B) - (III), (C) - (II), (D) - (I)
(A) - (IV), (B) - (III), (C) - (I), (D) - (II)

2026: 19 May Shift 2

Identify the correct statement regarding the supply of a given commodity.

2025: 22 May Shift 1

Perfect information implies that all buyers and all sellers are completely informed about the price, quality and other relevant details about the product, as well as the market. These features result in the single most distinguishing characteristic of perfect competition, that is...

2025: 14 May Shift 1

Arrange the following statements related to negative externalities in correct sequence

(A) There is an oil refinery which refines crude petroleum and sells it in the market

(B) Pollution harms well-being and also kills fish or other organisms

(D) Such harmful effects that the refinery is inflicting on others, for which it will not bear any cost, are called externalities

2025: 2 June Shift 1

Match List-I with List-II

List-I	List-II
(A) Perfect Competition	(I) A typical characteristic of perfect competition.
(B) Perfectly elastic demand curve	(II) An individual firm is a price taker.
(C) Degree of price control under perfect competition	(III) The firm can sell any amount of its output at the prevailing price.
(D) Freedom of entry and exit	(IV) No control over price.

Choose the correct answer from the options given below:

Which of the following is not a feature of perfect competition?

Solution

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