Scelta multipla
A perfectly competitive industry is characterized by which of the following?
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11. Perfect Competition
Characteristics of Perfect Competition
Scelta multipla
Which of the following is an example of a perfectly competitive market?
A
Electricity utilities
B
Automobile manufacturing
C
Cell phone service providers
D
Wheat farming
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Step 1: Understand the characteristics of a perfectly competitive market. These include many buyers and sellers, homogeneous products, free entry and exit, and perfect information.
Step 2: Analyze each option to see if it fits these characteristics. For example, electricity utilities often have few providers and are regulated, so they are not perfectly competitive.
Step 3: Consider automobile manufacturing, which has few large firms and differentiated products, so it is not perfectly competitive.
Step 4: Look at cell phone service providers, which usually have limited competition and differentiated services, so they are not perfectly competitive.
Step 5: Recognize that wheat farming typically involves many small producers selling a homogeneous product with easy market entry and exit, fitting the model of perfect competition.
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