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1. Markets and competition Identical products, as well as a large number of buyers and sellers, are characteristics of a market. In such markets sellers of goods influence the prevailing market price, giving them the role of price in the market. True or False: The market for wheat does exhibit the two primary characteristics that define perfectly competitive markets True O False

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Answer #1

Anwer 1: Identical products, as well as a large number of buyers and sellers, are characteristics of a perfectly competitive market. In such market, sellers of goods do not influence the prevailing market price, giving them the role of price takers in the market.

Explanation: In a perfectly competitive firm, there are many buyers and sellers. In addition, all sellers sell an identical good. Moreover, since each seller dominates a very small section of the market, sellers cannot influence the price. So, sellers are price takers.

Answer 2. True

Explanation: There are many sellers and buyers in the wheat market. Moreover, all sellers sell more or less the same type of wheat.

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