Which market structure features unlimited firms, low to no barriers to entry, one product, and price takers?

Which market structure features unlimited firms, low to no barriers to entry, one product, and price takers?

• A. Oligopoly
• B. Pure (Perfect) Competition
• C. Monopoly
• D. Monopolistic Competition

Answer: (B)

In a perfectly competitive market, there are countless firms selling a single, identical product, and entry or exit is easy. Because each firm is tiny relative to the whole market, none can influence the price, so all firms take the market price as given. This combination—many firms, easy entry, a homogeneous product, and price-taking behavior—matches the description in the question exactly. Other structures don’t fit as well: oligopoly has only a few firms and potential barriers; monopoly has a single seller; monopolistic competition has many firms but differentiated products and some ability to set prices.

In a perfectly competitive market, there are countless firms selling a single, identical product, and entry or exit is easy. Because each firm is tiny relative to the whole market, none can influence the price, so all firms take the market price as given. This combination—many firms, easy entry, a homogeneous product, and price-taking behavior—matches the description in the question exactly.

Other structures don’t fit as well: oligopoly has only a few firms and potential barriers; monopoly has a single seller; monopolistic competition has many firms but differentiated products and some ability to set prices.