Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 12, Problem 1P
To determine
To find:
The most perfect competitive industry in the given list of industries.
Expert Solution & Answer
Answer to Problem 1P
Option b. Fast food industry, and Option e. Clothing industry are most likely to be
Explanation of Solution
Fast food industry and clothing industry are most likely to be perfectly competitive because a perfectly competitive market is an organized market with the liberty of free entry and exits of firms, and both the sellers and buyers have perfect knowledge about the market and prevailing prices. However, the price of goods and services in the fast food industry and clothing industry is determined by the market forces, demand and supply, and every firm must follow the price determined by the industry.
The Chicago board of trade and NY stock exchange belong to
Economics Concept Introduction
Perfect competition:
Perfect competition is that market structure in which large number of buyers and sellers of a commodity exist, and firms sell a homogeneous product. Under this market, firms are the price taker and buyers and sellers contain perfect knowledge about the prevailing market condition.
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