Question

Identical products, as well as a large number of buyers and sellers, are characteristics of aperfectly competitive market. In such markets, sellers of goodscannot influence the prevailing market price, giving them the role of pricemakers in the market. True or False: The market for tomatoes exhibits the two primary characteristics that define perfectly competitive markets.

Answer 1

The answer is: True.

Step-by-step explanation:

A perfectly competitive market structure refers to the market which has large number of buyers and sellers. The sellers produce homogenous products. No single seller is able to influence market price. All the firms are price takers. They face a horizontal line demand curve.

The market for tomatoes possess two main characteristics of a perfectly competitive market. There are large number of buyers and sellers for tomatoes. All these sellers are providing almost identical products.