Multiple Choice
Which of the following statements about competition and rivalry in competitive markets is true?
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3. The Market Forces of Supply and Demand
Competitive Markets
Multiple Choice
Which of the following is an example of a firm producing multiple products in a competitive market?
A
A wheat farmer who only grows wheat
B
A gas station selling only gasoline
C
A bakery that sells both bread and pastries
D
A monopolist selling a single brand of soda
Verified step by step guidance1
Step 1: Understand the concept of a competitive market. In microeconomics, a competitive market is characterized by many firms selling similar or identical products, with no single firm able to influence the market price significantly.
Step 2: Identify what it means for a firm to produce multiple products. This means the firm offers more than one distinct good or service to consumers, diversifying its product line.
Step 3: Analyze each option to see if it fits both criteria: operating in a competitive market and producing multiple products.
Step 4: The wheat farmer and gas station each produce or sell only one product, so they do not meet the multiple products criterion.
Step 5: The bakery sells both bread and pastries, which are different products, and typically operates in a competitive market with many similar bakeries, making it the correct example.
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