Multiple Choice
Which of the following goods would most likely be sold in a perfectly competitive market?
3. The Market Forces of Supply and Demand
Competitive Markets
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Products sold in a perfectly competitive market are
A
Homogenous
B
Heterogeneous
C
Efficient
D
Inefficient
E
Both (a) and (c)
Verified step by step guidance1
Understand the characteristics of a perfectly competitive market. In such a market, there are many buyers and sellers, and no single buyer or seller can influence the market price.
Recognize that one of the key features of a perfectly competitive market is that the products offered by different sellers are identical or homogenous. This means that consumers view the products as perfect substitutes.
Consider the implications of homogeneity: since products are identical, consumers will base their purchasing decisions solely on price, leading to a situation where firms are price takers.
Evaluate the efficiency aspect: perfectly competitive markets are considered efficient because resources are allocated in a way that maximizes total surplus (consumer and producer surplus).
Conclude that in a perfectly competitive market, products are homogenous and the market is efficient, making the correct answer 'Both (a) and (c)'.
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