The correct answer is Option 4: price taking behaviour
- Price-taking behavior is the most distinguishing characteristic of a perfectly competitive market. It means that neither buyers nor sellers can influence the market price, and they must accept it as given.
- While free entry and exit, homogeneous products, and perfect information are important conditions for perfect competition, they are not its defining feature.
- These conditions lead to price-taking behavior, making it the key characteristic that sets perfect competition apart from other market structures.
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