Asked by Yassine Wydadi on Jul 06, 2024
Verified
Use the following statements to answer this question: I. Markets that have only a few sellers cannot be highly competitive.
II) Markets with many sellers are always perfectly competitive.
A) I and II are true.
B) I is true and II is false.
C) II is true and I is false.
D) I and II are false.
Highly Competitive
A market situation featuring a large number of firms vying for consumers’ attention, often leading to lower prices and innovative products.
Perfectly Competitive
A perfectly competitive market is one where there are many buyers and sellers, all selling identical products, with no single buyer or seller able to influence the market price.
Sellers
Participants in a market who offer goods or services for sale.
- Gain insight into the impact of market structure on the well-being of consumers and the effectiveness of market operations.
Verified Answer
LW
Linzey WatkinsJul 11, 2024
Final Answer :
D
Explanation :
Markets with only a few sellers can still be highly competitive if those sellers are in fierce competition with each other. Markets with many sellers are not always perfectly competitive, as there can be barriers to entry, product differentiation, or other factors that prevent perfect competition.
Learning Objectives
- Gain insight into the impact of market structure on the well-being of consumers and the effectiveness of market operations.