Asked by Jonathan Ghansiam on May 26, 2024
Verified
In order to conclude that markets are efficient, we assume that they are perfectly competitive.
Perfectly Competitive
Describes a market structure where many firms sell identical products, there are no barriers to entry, and no single buyer or seller can influence the market price.
- Investigate the impact of market rivalry on enhancing the combined gains for buyers and sellers.
Verified Answer
CH
Carson HolmesMay 29, 2024
Final Answer :
True
Explanation :
Market efficiency, in the context of the Efficient Market Hypothesis, assumes that all available information is fully reflected in asset prices at all times, which is more likely in a perfectly competitive market where numerous buyers and sellers have equal access to information and transactions are cost-free, allowing for the immediate and unbiased incorporation of information into prices.
Learning Objectives
- Investigate the impact of market rivalry on enhancing the combined gains for buyers and sellers.
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