Question

Identical products, as well as a large number of buyers and sellers, are characteristics of a__________

a) perfectly competitive
b) monopolistic market.
In such markets, sellers of goods_________
a) can
b) cannot influence the prevailing market price, giving them
the role of price__________
a) makers
b) takers in the market.
True or False: The market for public utilities, like gas and electricity, does not exhibit the two primary characteristics that define perfectly competitive markets.

Answer 1

1. a. Perfectly Competitive

2. b. Cannot influence prevailing market price,

3. b. Giving them role of PRICE TAKERS in market

4. True

Step-by-step explanation:

Perfect Competition is market form with : Very large no of buyers & sellers, homogeneous goods, uniform prices, perfect information about good.

1 a. Homogeneous goods without any product differentiation i.e Identical goods are a primary characteristic of perfect competition

2 b. Very large no of sellers means they cannot influence the price of the product, since they have an insignificant share of entire market supply.

3. b. So, they have no price decision power & are 'price takers' of the industry prevailing price

4. It is true that 'The market for public utilities, like gas and electricity, does not exhibit the two primary characteristics that define perfectly competitive markets'. Such because these utilities sellers are either single sellers (monopoly) or less sellers (oligopoly).