Also, do you have any idea how I can answer this question? It's not an essay question just homework.
Assess how the stock market exchange matches up against the assumption of a perfectly competitive market. Then, assess how each of the assumptions has been impacted by the internet.
I wrote this:
Perfect competition refers to a theoretical market structure. Some of the assumptions include: There are many buyers and sellers, no barriers to entry or exit, sell homogenous goods and perfect knowledge of information. However, in times such as the Wall Street Crash, where major stocks crashed, it could be argued that the stock market wasn’t perfectly competitive. That is because it undermined the assumption that a perfect market possesses many buyers and sellers and perfect information; it is difficult to be completely aware of the the current profits of a company.
Another assumption of a perfectly competitive market is for firms to maximise profit. However, consumers can easily check and compare the different prices of brokers on the internet. This suggests that modern technology has helped to reduce the profit margin of brokers, undermining an assumption for a perfectly competitive market and increasing consumer surplus.