Multiple Choice
Why are stores such as Toys R Us and IKEA known as category killers in competitive markets?
117
views
3. The Market Forces of Supply and Demand
Competitive Markets
Multiple Choice
Which of the following is an example of competition in a competitive market?
A
Consumers having no choice but to buy from one supplier
B
Government setting the price for a product
C
Multiple firms selling similar products and trying to attract the same customers
D
A single firm controlling the entire market for a product
Verified step by step guidance1
Understand the concept of a competitive market: it is characterized by many firms selling similar or identical products, where no single firm can influence the market price significantly.
Analyze each option to see if it fits the characteristics of a competitive market:
Option 1: 'Consumers having no choice but to buy from one supplier' implies a monopoly or lack of competition, which is not competitive market behavior.
Option 2: 'Government setting the price for a product' indicates price control or regulation, which distorts free competition.
Option 3: 'Multiple firms selling similar products and trying to attract the same customers' fits the definition of competition in a competitive market because firms compete on price, quality, and other factors.
Option 4: 'A single firm controlling the entire market for a product' describes a monopoly, which is the opposite of a competitive market.
Related Videos
Related Practice
