Choose the correct statements about competitive markets. 1.In a competitive market, prices are eventually driven down...
Choose the correct statements about competitive markets. 1.In a competitive market, prices are eventually driven down to zero. 2. A single buyer in a competitive market cannot influence the price. 3. A single seller in a competitive market cannot influence the price. 4. A competitive market is a market for services but not for goods. A. statements 1 and 2 are correct. B. Statements 2 and 3 are correct. C. Statements 1 and 4 are correct. D. Statements 3 and 4 are correct.
Homework Answers
Ans. = (Option B) Statements 2 and 3 are correct.
A Single Buyer in a competitive market cannot influence the price.
A Single Seller in a competitive market cannot influence the price.
In a Competitive Market, There are Large Number of Buyers and Large Number of Sellers as well.
Due to this, A Single Seller or A Single Buyer cannot Influence the Price because the Sellers and Buyers have options.
Suppose, If
One Seller Increases the Prices, then Buyer can purchase the Good
from any other Seller as all Sellers sell the Identical product in
the Competitive Market.
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