Multiple Choice
Which of the following is NOT a strategy used in target marketing within competitive markets?
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3. The Market Forces of Supply and Demand
Competitive Markets
Multiple Choice
Which of the following is a characteristic of a perfectly competitive market?
A
Firms have significant control over prices
B
Products are differentiated
C
Many buyers and sellers
D
Firms can easily enter and exit the market
Verified step by step guidance1
Understand the defining features of a perfectly competitive market. These include many buyers and sellers, homogeneous (identical) products, free entry and exit of firms, and firms being price takers (no control over prices).
Analyze each option given in the problem: 'Firms have significant control over prices' contradicts the price-taking nature of firms in perfect competition.
Consider 'Products are differentiated' — in perfect competition, products are identical, so this characteristic does not apply.
Look at 'Many buyers and sellers' — this is a key characteristic of perfect competition, ensuring no single buyer or seller can influence the market price.
Examine 'Firms can easily enter and exit the market' — this is also a characteristic of perfect competition, allowing the market to adjust supply freely.
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