Which of the following is not a feature of a perfect competition market?
(a) Advertising and selling cost
Advertising and selling costs are not characteristic of a perfectly competitive market.
A perfect competitive market is characterized by the homogeneity of goods, full knowledge of the market and large number of buyers and sellers.
In a perfect competitive market, the homogeneity of goods is its main characteristic. This means that the units of the commodity are produced by anyone but are substitutes for each other and the producer or seller cannot charge more than the prevailing price of the commodity. If he tries to increase the price of the commodity, then the buyer can get that commodity at a lower price than any other competing producer.
Full knowledge of the market is also a characteristic of a perfect competitive market. Both the buyer and the seller have complete knowledge of the market conditions. The buyer knows very well which item is worth how much and while shopping in the market, he buys only after understanding the condition of the market.
A large number of buyers and sellers is the main characteristic of a perfect market. In a perfectly competitive market, there are many sellers, they compete with each other. There are many buyers in a perfectly competitive market. Due to this, both the buyer and the seller are benefited. The buyer is able to buy the goods according to his convenience at his convenient price and the seller also gets a lot of buyers.
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