Select which characteristic of a perfectly competitive industry is not met in the examples below. Four fundamental characteristics of a perfectly competitive industry: (1) there is a large number of buyers and sellers, (2) firms in the industry produce and sell a homogeneous product, (3) information is equally accessible to both buyers and sellers, and
Select which characteristic of a
(1) there is a large number of buyers and sellers,
(2) firms in the industry produce and sell a homogeneous product,
(3) information is equally accessible to both buyers and sellers, and
(4) there are insignificant barriers to industry entry or exit.
Part 2 Even though one firm produces a large portion of the industry's total output, there are many firms in the industry, and their products are indistinguishable. Firms can easily exit and enter the industry. This example violates characteristic number enter your response here.
Part 3 There are many buyers and sellers in the industry. Consumers have equal information about the prices of firms' products, which differ slightly in quality from firm to firm. This example violates characteristic number enter your response here.
Part 4 Many taxicabs compete in a city. The city's government requires all taxicabs to provide identical service. Taxicabs are virtually identical, and all drivers must wear a designated uniform. The government also limits the number of taxicab companies that can operate within the city's boundaries. This example violates characteristic number enter your response here.
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