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What difference does it make to the market when we say that there are large number of sellers in a perfectly competitive market? Explain

Answer» <html><body><p></p>Solution : Very <a href="https://interviewquestions.tuteehub.com/tag/large-1066424" style="font-weight:bold;" target="_blank" title="Click to know more about LARGE">LARGE</a> no. of buyers and sellers: The no. of sellers is so large that the share of each seller is insignificant in the <a href="https://interviewquestions.tuteehub.com/tag/total-711110" style="font-weight:bold;" target="_blank" title="Click to know more about TOTAL">TOTAL</a> supply. Hence, an <a href="https://interviewquestions.tuteehub.com/tag/individual-1041871" style="font-weight:bold;" target="_blank" title="Click to know more about INDIVIDUAL">INDIVIDUAL</a> seller cannot influence the market price. Similarly, a single <a href="https://interviewquestions.tuteehub.com/tag/buyer-906424" style="font-weight:bold;" target="_blank" title="Click to know more about BUYER">BUYER</a>'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 <a href="https://interviewquestions.tuteehub.com/tag/accept-846678" style="font-weight:bold;" target="_blank" title="Click to know more about ACCEPT">ACCEPT</a> the same price. As a result, uniform price prevails in the market.</body></html>


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