Does a real-world market have to meet all the assumptions of the theory of perfect competition before it is considered a perfectly competitive market?
A) No, probably no real-world market meets all the assumptions of the theory of perfect competition. All that is necessary is that a real-world market behave as if it satisfies all the assumptions.
B) Yes, if a real-world market does not meet the assumptions, then it cannot be considered a perfectly competitive market.
C) Yes, unless it is a new market such as the computer market. New markets are not held to the same assumptions as old, more established markets.
D) No, but it does have to meet the assumption of producing and selling a homogeneous product. It does not have to fully meet the other assumptions.
Ans: A) No, probably no real-world market meets all the assumptions of the theory of perfect competition. All that is necessary is that a real-world market behave as if it satisfies all the assumptions.
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