Explain the implications of the following ina perfectly competitive market: (a) Large number of sellers (b) Homogeneous products

Explain the implications of the following ina perfectly competitive ma

1.	Explain the implications of the following ina perfectly competitive market: (a) Large number of sellers (b) Homogeneous products
Answer» <html><body><p></p>Solution :(a) Large number of sellers means that number of firms are large enough so that contribution to total <a href="https://interviewquestions.tuteehub.com/tag/ouput-1141511" style="font-weight:bold;" target="_blank" title="Click to know more about OUPUT">OUPUT</a> of the industry by any individual firm is negligible. So, no single firm is in a position to influence the market price on its own by chaining its own output, Thus, Price <a href="https://interviewquestions.tuteehub.com/tag/remains-621920" style="font-weight:bold;" target="_blank" title="Click to know more about REMAINS">REMAINS</a> unchanged.<br/> (b) <a href="https://interviewquestions.tuteehub.com/tag/homogeneous-1028736" style="font-weight:bold;" target="_blank" title="Click to know more about HOMOGENEOUS">HOMOGENEOUS</a> products means that buyers treat products of all the firms as same in all respect as homogeneous product. As such no firm can charge a higher price because no buyer is willing to pay the same. Then market price remains the same for all the firms.</body></html>