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Which market structure is characterized by the presence of innumerable buyers and sellers in which the sellers produce a homogeneous product?

a. Perfect competition
b. Monopolistic competition
c. Oligopoly
d. Monopoly
e. None of the above

1 Answer

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Final answer:

The market structure with numerous buyers and sellers producing a homogeneous product is called perfect competition.

Step-by-step explanation:

The market structure characterized by the presence of innumerable buyers and sellers, where sellers produce a homogeneous product, is known as perfect competition. In this market, each firm produces a negligible amount of the total product supply, so no single firm can influence the market price. As a result, the main decision for producers is determining the quantity to produce, based on the market equilibrium price. Choices 'b' Monopolistic competition, 'c' Oligopoly, and 'd' Monopoly do not fit this description as they involve differentiated products, few producers, and a single producer, respectively.

User Leonhard Triendl
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