In a market economy with perfect competition, sellers

Question

In a market economy with perfect competition, sellers

Group of answer choices

control prices

enter and exit the market freely

join with other sellers to influence prices

have incomplete information about market conditions

Answer 1

enter and exit the market freely

Answer 2

In a market economy with perfect competition, sellers have the ability to enter and exit the market freely. This means that there are no barriers to entry or exit, allowing new sellers to enter the market and existing sellers to leave if they choose to do so. However, sellers do not control prices in perfect competition. Prices are determined by the overall market forces of supply and demand. Each seller is a price taker and must accept the market price for their goods or services. Sellers also do not join with other sellers to influence prices. In perfect competition, there are many small sellers who have no significant impact on the market as a whole. Lastly, sellers in perfect competition have complete information about market conditions. They have access to all relevant information regarding prices, quantities, and market trends, allowing them to make informed decisions about their production and pricing strategies.