Which of the following is not a feature

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Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Firms under Perfect Competition

Question:

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

Options:

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 Answer:

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

Explanation:

The correct answer is Option (2) → The product of one firm can be differentiated from the product of other firms.

In perfect competition, all firms sell homogeneous (identical) products. There is no product differentiation — buyers treat all products as perfect substitutes.
The other features listed are true characteristics of perfect competition:
- There are many buyers and sellers.
- Free entry and exit ensure firms earn only normal profit in the long run.
- There is perfect information among buyers and sellers about prices and products.