In competitive markets, a. markets are more likely to be in equilibrium. b. sellers are price setters. c. firms produce identical products. d. buyers can influence the market price more easily than sellers.

Question

Sydnee

Business

25 August, 18:58

In competitive markets, a. markets are more likely to be in equilibrium. b. sellers are price setters. c. firms produce identical products. d. buyers can influence the market price more easily than sellers.

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Olive Hanson · Answer 1

c. firms produce identical products

Explanation:

Perfect Competition is a market form in which many buyers sell identical (homogeneous) goods to many buyers at uniform prices.

Markets are not always in equilibrium, are only when MR = MC. Sellers, being many & selling same products - have insignificant supply share & hence have no control on price determination and are only Price Takers. Similarly, many buyers also have insignificant share of market demand & hence don't have much influence over market price.