Which of the following market would most closely satisfy the requirements for a competitive market ?
Correct answer: D. milk
- A. electricity
- B. cable television
- C. cola
- D. milk
- E. All of these answers represent competitive markets
Explanation
Milk is produced by many relatively small sellers and is fairly homogeneous, making it closer to a competitive market than electricity, cable television, or branded cola. The other markets have stronger barriers, product differentiation, or concentration.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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