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Asked by Jeannie Howell on Apr 29, 2024

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A few sellers may behave as if they operate in a perfectly competitive market if the market demand is:

A) highly inelastic.
B) very elastic.
C) unitary elastic.
D) composed of many small buyers.

Perfectly Competitive Market

A market structure characterized by a large number of small firms, homogeneity of products, and free entry and exit, leading to optimal distribution of resources.

Market Demand

The combined amount of a product or service that every consumer in a market is prepared and capable of buying at different price points.

Elastic

A characteristic of a good or service whose demand or supply changes significantly when its price changes, indicating sensitivity to price adjustments.

  • Understand the implications of market structure on consumer welfare and market efficiency.
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Isabel PinheiroMay 04, 2024
Final Answer :
B
Explanation :
In a perfectly competitive market, sellers face a very elastic demand curve because consumers have many substitutes and can easily switch from one seller to another if the price increases. This means that sellers have little to no power to set prices above the market equilibrium, as doing so would result in losing nearly all their customers to competitors.

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