Question

In a perfectly competitive market, all producers sellidentical goods or services. Additionally, there aremany buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are pricemakers . True or False: The market for public utilities, such as gas and electricity, exhibits the two primary characteristics that define perfectly competitive markets. True False

Answer 1

1. True

2. False

Step-by-step explanation:

1. Indeed, we can assert that for a market to be termed as perfectly competitive it must have not just one seller or buyer but many sellers and buyers. Hence, as for buyers, they are able to bargain the price they are willing to buy, while sellers are also set the price for their goods/products.

2. Since in most economies the price of public utilities, such as gas and electricity, are determined by the government not the average seller/buyer, it would be false to say that they exhibited characteristics that define perfectly competitive markets.