Multiple Choice
The bargaining power of suppliers is enhanced under which of the following market conditions?
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3. The Market Forces of Supply and Demand
Competitive Markets
Multiple Choice
Which of the following is a feature of a purely competitive market?
A
Firms are price takers
B
Products are highly differentiated
C
Firms have control over market price
D
There are significant barriers to entry
Verified step by step guidance1
Understand the characteristics of a purely competitive market, which is a market structure with many buyers and sellers, where no single firm can influence the market price.
Recall that in a purely competitive market, products are homogeneous or identical, meaning there is no differentiation between goods offered by different firms.
Recognize that firms in such a market are price takers, meaning they accept the market price as given and cannot influence it by their own actions.
Note that there are no significant barriers to entry or exit in a purely competitive market, allowing firms to freely enter or leave the market.
Conclude that the correct feature of a purely competitive market from the options given is that firms are price takers.
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