Which of the following are features of the perfect competition market?

(A) Price taking behavior of firms.
(B) Restriction on entry and exit of firms.
(C) Large number of sellers and buyers.
(D) Asymmetric Information.

Choose the correct answer from the options given below:

(A) and (C) only

The correct answer is Option (3) → (A) and (C) only

(A) Price taking behavior of firms: Correct. In a perfectly competitive market, individual firms are price takers. This means they have no power to influence the market price of the good or service. They must accept the prevailing market price determined by the overall supply and demand. This occurs because each firm's output is an insignificantly small fraction of the total market supply.

(B) Restriction on entry and exit of firms: False. Perfect competition is characterized by free entry and exit of firms. There are no significant barriers (legal, technological, financial, etc.) that prevent new firms from entering the market if they see profit opportunities, or existing firms from leaving if they are incurring losses.

(C) Large number of sellers and buyers: Correct . A perfectly competitive market has a very large number of both sellers and buyers. No single seller or buyer has enough market power to influence the market price. This abundance of participants contributes to the price-taking behavior.

(D) Asymmetric Information: False. Perfect competition assumes perfect information among all market participants. Buyers and sellers have complete knowledge about prices, product quality, production methods, and all other relevant market conditions. Asymmetric information (where one party has more or better information than the other) is a characteristic of imperfect markets, not perfect competition.