Multiple Choice
In a perfectly competitive market, we assume the product is identical in the minds of which group?
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3. The Market Forces of Supply and Demand
Competitive Markets
Multiple Choice
In a competitive market such as the NASDAQ, if you purchase shares of stock, who is the most likely seller of those shares?
A
Another investor who wants to sell their shares
B
The NASDAQ exchange itself
C
The company that issued the stock
D
A government agency
Verified step by step guidance1
Understand the nature of a competitive stock market like NASDAQ, where shares are traded between investors rather than directly from the company or government.
Recognize that when you buy shares on NASDAQ, you are purchasing them from someone who already owns those shares and wants to sell them.
Identify that the NASDAQ exchange acts as a platform or marketplace facilitating these transactions but does not itself sell shares.
Note that the company that issued the stock typically sells shares only during initial public offerings (IPOs) or additional offerings, not in regular market transactions.
Conclude that the most likely seller of shares in a competitive market like NASDAQ is another investor who wants to sell their shares.
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