Please Complete scenario with exact response rlet quizquit action bGuid CAPLCOAB
ID: 1119582 • Letter: P
Question
Please Complete scenario with exact response
rlet quizquit action bGuid CAPLCOABO1010000003bd3a0100400008csoos1-0007ck soos 1 0007&ck;» m . 15 1 24252044 1 1 OAAA062B015 37200f2f6 7680000 Graoed Assignment Oue Thursday 12.14.17 at 1145 PM Altempts: verage 1. Characteristics of competitive markets The model of competitive markets relies on the foilwing four core assumptions 1. There must be many buyers and sellers, none of which is targe in relation to total sales or purchases. In other words, a few p cant doninate the market 2. Each firm produces and sells a homogeneous product that is indistinguishable frons all other Srms products in a given Industry. That is, buyers must regard all seler products as equlvalent, or identical have all relevant information about prices, product quality, sources of supply, etc ry into and exit from the nAstry. Nm frms can enter the m 4. Firms have tree et ease. and eneig trs a' ette mater eaily. There are no barrers to entry or exit The fiest three a ouarantees that a market remains compettive in the long run umstions imoly that all consumers and frms are price takers. The final assination is not necessary for price-taking behavioc but deney whether or nt each of the tollwing scenars dese a perfecty The soverement ha AIDS dva That comspany is the only em permitted to sell the drug han grantet aatent to tos the quality of the tutoring at the siferent comos to be lw Several stores in the mall sellhoade seatiitsacres 23
Explanation / Answer
Ans:
Perfect competition is a market structure which has the following characteristics,
1) Identical product are sold 2) firms are price takers in a perfect competitive market 3) All firms have a relatively small market share 4) Buyers have complete information and knowledge about the product.5) There is a freedom of entry and exit in the industry.
Scenario Perfectly competitive Patent to pharmaceutical company No, no free entry Tutoring services to high school students Yes, meets all assumptions Broadband Internet access No,not many sellers Stores in the mall No, not a standardized product