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| 1. |
Explain the implicaiton of large number of buyers in a perfectly competitive market. |
| Answer» SOLUTION : The no. of sellers is so large that the share of each seller is INSIGNIFICANT in the TOTAL supply. Hence, an individual seller cannot influence the market PRICE. Similarly, a single buyer's share in total purchase is so insignificant because of their large no. that an individual buyer cannot influence the market price. Under such conditions, price of a commodity is determined by the market forces of demand and supply and each buyer and seller has to accept the same price. As a result, uniform price PREVAILS in the market. | |