We can define the necessary conditions for a competitive industry as follows:

 i) There are many firms; a single firm produces and sells a tiny fraction of the total market sold to many consumers; a single consumer`s purchase is also a tiny fraction of the total market purchase.

 ii) Producers and consumers are well informed about the quality and price of the good in question.

iii) Firms produce and sell an identical product.

iv) There are no restrictions on entry into (or exit from) the market, and established firms don`t have any specific advantage over new firms.

On the other hand, as the producers and consumers are price takers, neither can influence the market price of the product. The correct answer is B.