Multiple Choice
In the market for desk lamps, which of the following best describes the outcome in a perfectly competitive market?
72
views
3. The Market Forces of Supply and Demand
Competitive Markets
Multiple Choice
Which of the following items is most likely to be sold in a market characterized by pure competition?
A
Ice cream
B
Corn
C
Cola
D
Jeans
Verified step by step guidance1
Step 1: Understand the characteristics of a purely competitive market. Such a market has many buyers and sellers, homogeneous (identical) products, free entry and exit, and perfect information.
Step 2: Analyze each item in the list to see if it fits the criteria of a purely competitive market. For example, ice cream, cola, and jeans are differentiated products with brand loyalty, which means they are not homogeneous.
Step 3: Consider corn as a product. Corn is a standardized agricultural product, typically sold in large quantities by many farmers, making it homogeneous and fitting the pure competition model.
Step 4: Conclude that corn is the item most likely sold in a purely competitive market because it meets the key characteristics: many sellers, identical product, and easy market entry.
Step 5: Remember that products like ice cream, cola, and jeans are usually sold in monopolistic competition or oligopoly markets due to product differentiation and branding.
Related Videos
Related Practice
