Final answer:
Competitive markets are characterized by many buyers and sellers, homogeneous products, perfect information, and free entry and exit, with no single entity able to control market prices. Barriers to entry and price controls do not represent competitive markets.
Step-by-step explanation:
Characteristics of a Competitive Market
Characteristics that define a competitive market include the following:
- Many buyers and sellers - This ensures that no single buyer or seller can control the market price.
- Homogeneous products - Products offered by different sellers are identical, making it easy for buyers to switch from one seller to another without any loss of value.
- Perfect information - All participants have access to all relevant information about the market and products, allowing them to make informed decisions.
- Free entry and exit - Firms can enter or leave the market with ease, which prevents long-term super-normal profits and encourages efficiency.
Characteristics not associated with competitive markets are barriers to entry and price control, as they prevent the market from being competitive.