Question

The "perfect information" assumption of perfect competition includes all of the following except one. Which one? Select one: a. Consumers know their preferences. b. Consumers know their income levels. c. Consumers know the prices available. d. Consumers can anticipate price changes. e. Firms know their costs, prices and technology.

Answer 1

Perfect competition is a market time where .

1.there a large number of sellers and buyers in the market.

2.the price is decided by the demand forces that is supply and demand in the market

3.products are homogeneous in nature .

4 there are no entry and exit barriers in the market.

5.it is assumed that the consumer and supplier has perfect knowledge about the market .

Perfect knowledge of the market means consumer know their preference, income levels, price availibility and technology related information .

But consumers cannot expect or anticipate any price change in this market .

They can only talk in terms of current situation.

So the answer is option D