Answer to Question #66389 in Microeconomics for Shemika
A large number of company is only one of criteria that characterize industry like perfectly competitive, but it is not enough.
The industry will be perfectly competitive if the following five criteria are met:
1) All firms sell an identical product;
2) All firms are price takers - they cannot control the market price of their product;
3) All firms have a relatively small market share;
4) Buyers have complete information about the product being sold and the prices charged by each firm; and
5) The industry is characterized by freedom of entry and exit.
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