Which condition ensures that no individual buyer or seller can influence the market by their size in a perfect competition?

The market consists of a large number of buyers and sellers

The correct answer is Option 4: The market consists of a large number of buyers and sellers

• The presence of a large number of buyers and sellers ensures that no single participant has enough market power to influence the price.
• Since each individual buyer or seller is small relative to the entire market, their actions do not significantly impact the overall market price.
• Other options contribute to perfect competition, but they do not directly ensure that no individual buyer or seller can influence the market.
  • Perfect information (Option 1) ensures that everyone knows the market price.
  • Free entry and exit (Option 2) allows firms to enter or leave based on profitability. This condition is essential for the large numbers of firms to exist.
  • Homogeneous products (Option 3) mean that products are identical across firms, reinforcing price-taking behavior.