Question

Which of the following industries might be classified in pure or perfect competition? O A. restaurants O B. software design O C. automobile manufacturing O D. all of the above O E. none of the above

Answer 1

in perfect competitive market there are -

1 large number of sellers and buyers in the market

2 price is decided by the market forces not by the buyers and the suppliers.

3.There is no barrier to entry and exit in the market 4.products are homogeneous and standardized. and 5.The demand curve is horizontal nature or we can say that perfect elastic in nature.

But restaurant and software design will come under monopolistic market because they are slightly differentiated in terms of quality sl,service etc .

For example in restaurant all of them serve food but they differ in terms of the quality of foods, the packaging of food, service provided in the restaurant etc.

Automobile manufacturer will come under the oligopoly market because in this few large Seller control the whole market .

So none of the option are correct.

option E is true