Multiple Choice
In the market for compound bows, which of the following best describes the outcome in a perfectly competitive market?
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3. The Market Forces of Supply and Demand
Competitive Markets
Multiple Choice
Which of the following is considered a market participant in a competitive market?
A
Natural resources
B
Buyers and sellers
C
Advertising agencies
D
Government regulators
Verified step by step guidance1
Understand the concept of a market participant: In microeconomics, market participants are the entities that actively engage in buying or selling goods and services within a market.
Identify the roles of each option: Natural resources are inputs or factors of production, not active buyers or sellers; advertising agencies provide services but do not directly buy or sell the product in the market; government regulators oversee market rules but do not participate as buyers or sellers.
Recognize that buyers and sellers are the primary agents who exchange goods and services in a competitive market, making them the true market participants.
Recall that a competitive market is characterized by many buyers and sellers freely interacting, which ensures efficient allocation of resources through supply and demand.
Conclude that among the given options, only buyers and sellers fit the definition of market participants in a competitive market.
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