Pure competition occurs when a market has
A. many buyers and sellers
B. informed buyers and sellers
C. homogeneous (similar) products
D. easy entry for new sellers
E. All of the above are true
Answer: (E) Some of the assumptions of pure or perfect competition are that there are many buyers and sellers in the market (A), there is perfect information in the market (B), the product being sold is homogeneous among the many sellers (C), and there is little or no entry or exit barriers (D). Since all these assumptions are true, the correct answer is "all of the above" (E).