Question

What is true in a perfectly competitive environment?

-There are expensive substitutes.
-There are limited substitutes.
-There are no substitutes.
-There are many substitutes.

Answer 1

In a perfectly competitive environment, there are many substitutes.

Step-by-step explanation:

Perfect competition is a market structure with the following conditions:

1. Many firms produce identical products
2. Many buyers and sellers are available
3. Sellers and buyers have all relevant information to make rational decisions about the product
4. Firms can enter and leave the market without any restrictions, allowing for free entry and exit

In a perfectly competitive environment, there are many substitutes. This means that consumers have multiple options to choose from, as there are numerous firms producing identical products. Each firm in a perfectly competitive market is a price taker, meaning they have no control over the price and must accept the market-determined price.