Which of the following markets is most likely to be considered a competitive market?

• A. Electricity distribution
• B. Commercial airline industry
• C. Wheat farming
• D. Local cable television service

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the characteristics of a competitive market. A competitive market typically has many buyers and sellers, homogeneous products, free entry and exit, and perfect information.
2. Step 2: Analyze each option based on these characteristics. For example, electricity distribution and local cable television service often have few providers and high barriers to entry, making them less competitive.
3. Step 3: Consider the commercial airline industry, which has fewer firms and significant barriers to entry, such as high capital costs and regulations, so it is not perfectly competitive.
4. Step 4: Examine wheat farming, which usually involves many farmers producing a standardized product with relatively easy entry and exit, fitting the competitive market model.
5. Step 5: Conclude that wheat farming is the most likely to be considered a competitive market because it best matches the key features of perfect competition.