In a perfectly competitive market, all producers sell (perfectly identical/different) goods or services. Additionally, there are (few, many) buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are price (takers, makers) True or False: The market for lettuce does not exhibit the two primary characteristics that define perfectly competitive markets.

Question

Reginald Hill

Business

6 November, 16:46

In a perfectly competitive market, all producers sell (perfectly identical/different) goods or services. Additionally, there are (few, many) buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are price (takers, makers) True or False: The market for lettuce does not exhibit the two primary characteristics that define perfectly competitive markets.

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Ayers · Answer 1

Perfectly identical goods, Many buyers & sellers, Price Takers. True

Explanation:

Perfectly Competitive market forms : consist - many buyers & sellers, trading homogeneous (identical) goods, at uniform prices.

Since, each firm constitutes an insignificant part of the market supply. So, firms don't have control over price determination & 'take' the price unanimously set by the industry.

Lettuce markets might not be an illustrative case of Perfect Competition as - The lettuce may not be homogeneous, it might be of different qualities. And the number of buyers & sellers may also not be that large. So, lettuce sellers might have certain control over price determination.