4 Markets and competition In a perfectly competitive market

4. Markets and competition In a perfectly competitive market, all producers sell goods or services. Additionally, there are buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are price True or False: The market for digital cable does exhibit the two primary characteristics that define perfectly competitive markets O True False

Solution

(a) In perfectly competitive market, all producers sell identical (homogenous) goods or services. Additionally, there are numerous (many) buyers and sellers. Because of these, both buyers and sellers are price takers.

(b) False

There are many buyers, but number of sellers is limited.