Question

Explain ‘large number of buyers and sellers’ as a feature of perfectly competitive market.
or
Explain the implications of large number of buyers in a perfectly competitive market.

or

Explain the implications of large number of sellers in a perfectly competitive market.

Answer 1

A perfectly competitive market is a market which consists of buyers and sellers. They produce a homogeneous product. When the number of buyers is more, the demand of an individual buyer is only a small portion of the market demand. Individual buyers cannot influence the market price of a good by varying their demands, and thus, an individual buyer is a price taker and not a price maker.