Quizzol

QUESTION:

dentical products, as well as a large number of buyers and sellers, are characteristics of a market. In such markets, sellers of goods influence the prevailing market price, giving them the role of price in the market.

True or False: The market for rice exhibits the two primary characteristics that define perfectly competitive markets.

True

False

ANSWER:

Identical products, as well as a large number of buyers and sellers, are characteristics of aperfectly competitive Correct

market. In such markets, sellers of goodscannot Correct

influence the prevailing market price, giving them the role of pricetakers Correct

in the market.

Points:

1 / 1

Perfectly competitive markets have two characteristics:

1.	The goods and services bought and sold are all exactly the same.
2.	There are large numbers of buyers and sellers, such that no single buyer or seller can affect the market price.

Taken together, these two characteristics imply that both buyers and sellers are price takers. That is, both must accept the price as determined by the broader market.

True or False: The market for rice exhibits the two primary characteristics that define perfectly competitive markets.

True

False

Points:

1 / 1

Perfectly competitive markets are characterized by large numbers of buyers and sellers who cannot influence market prices and who buy and sell identical products.

Although in reality, most markets do not perfectly adhere to the assumptions of the perfectly competitive markets, some markets are very close to perfect competition.

For example, the market for rice has millions of consumers who buy rice, as well as thousands of farmers producing and selling rice. These consumers and producers take the market price as given and make their production and consumption decisions based on this prevailing price.

Posted by Cleveland on August 30, 2024