Question

Why are we unable to conclude that large numbers of entries into and exits from all U.S. industries imply that all the industries are perfectly competitive? (Hint: What are the other characteristics of perfect competition?)

Short answer

The vendor shouldn't show prick and choose method in acceptingthe worth of the commodity.

Step-by-step solution

Introduction

The first condition is thatthe amount of buyers and sellers must be so large that none of them individually isduring a position to influencethe worth and output of the industry asa full.within the market the position of a purchaser or a selleris simply sort of a drop of water in an ocean.

Given Information

Each firm should produce and sell a homogeneous product so no buyer has any preference for the merchandise of somebody seller over others. If goods are homogeneous then price also will be uniform everywhere.

Explanation

The firm should be liberal to enter or leave the firm. If there's hope of profit the firm will enter in business and if there's profitability of loss, the firm will leave the business.