Which market structure allows many vendors to supply a product with no restrictions on entering the market?

The correct answer is perfect competition, which characterizes a market structure in which numerous vendors can supply homogeneous products, and there are no significant barriers to entry or exit within the market. In perfect competition, all firms are price takers, meaning they must accept the market price determined by supply and demand, as no single seller has enough market power to influence prices.

New firms can enter the market freely when they recognize profitable opportunities, which helps ensure that resources are allocated efficiently. This structure fosters innovation and responsiveness to consumer preferences since firms must continually optimize their operations to remain competitive.

The other market structures—monopoly, duopoly, and oligopoly—do not offer the same level of access to new sellers. For instance, a monopoly exists where a single vendor controls the entire market, prohibiting any competition. A duopoly is characterized by only two suppliers controlling the market, while an oligopoly features a few firms that can dominate the market, often leading to strategic interactions and pricing power among them. Each of these structures limits the availability of market entry, which is fundamentally different from the openness present in perfect competition.