Question

Consider the markets for three products below. Indicate which characteristics of a competitive market are met by these markets.

Market : Gasoline
a. Large number of buyers
b. Standardized good
c. Full information
d. No transaction cost
e. Participants are price takers

Market: barbershop haircuts

a. Large number of buyers
b. Standardized good
c. Full information
d. No transaction cost
e. Participants are price takers

Market: bicycles

a. Large number of buyers
b. Standardized good
c. Full information
d. No transaction cost
e. Participants are price takers

Answer 1

Market : Gasoline

b. Standardized good

c. Full information

e. Participants are price takers.

Market : Barbershop haircuts

a. Large number of buyers

c. Full information

Market : Bicycles

a. Large number of buyers

b. Standardized good

c. Full information

d. No transaction cost

Step-by-step explanation:

The three markets will have different characteristics which will cause the competition. The Gasoline market has standardized product and the customers are price takers. Usually the prices are fixed for the products and there is no bargaining.