Multiple Choice
In a competitive market for tilapia, if two people are both buyers, how does their combined demand affect the market demand curve?
80
views
3. The Market Forces of Supply and Demand
Competitive Markets
Multiple Choice
Which of the following goods is most likely to be sold in a perfectly competitive market?
A
Smartphones
B
Designer clothing
C
Wheat
D
Electricity from a local utility
Verified step by step guidance1
Step 1: Understand the characteristics of a perfectly competitive market. These include many buyers and sellers, homogeneous products, free entry and exit, and perfect information.
Step 2: Analyze each good based on these characteristics. For example, smartphones and designer clothing are differentiated products with brand loyalty, so they do not fit the homogeneous product criterion.
Step 3: Consider wheat, which is a standardized agricultural product with many sellers and buyers, making it a good example of a homogeneous product in a competitive market.
Step 4: Evaluate electricity from a local utility, which is typically a natural monopoly due to high infrastructure costs and limited competition, so it does not fit the perfectly competitive market model.
Step 5: Conclude that wheat is most likely sold in a perfectly competitive market because it meets the key criteria of many sellers, homogeneous product, and easy market entry.
Related Videos
Related Practice
