Which of the following is not characteristics of a perfect competition ?
Answer Details
The characteristic of a perfect competition that is NOT correct is "supply and demand are equal".
In a perfect competition, many sellers and buyers are present in the market. The buyers and sellers have perfect knowledge of the market situation, meaning they are aware of the prices, products, and services available in the market. Products sold in a perfectly competitive market are identical, meaning that buyers do not differentiate between the products of one seller from another.
Discrimination is not present in a perfectly competitive market, meaning that all buyers and sellers are treated equally. However, the concept of "supply and demand are equal" is not a characteristic of perfect competition. In fact, perfect competition assumes that supply and demand interact freely in the market to determine the equilibrium price and quantity.
In other words, the equilibrium price is where the supply of goods and services meets the demand of buyers, but it is not a necessary condition for perfect competition. Instead, in perfect competition, no single buyer or seller has enough market power to influence the market price.