Competition in a market system denotes a condition where:

• A. many buyers and sellers interact, each unable to individually influence the market price
• B. a single firm dominates the market and sets prices for all buyers
• C. government agencies determine the allocation of goods and services
• D. buyers and sellers collude to fix prices and restrict output

Answer: (A)

Verified step by step guidance

1. Understand the concept of competition in a market system, which typically refers to a market structure where many buyers and sellers interact freely.
2. Recognize that in a competitive market, no single buyer or seller has the power to influence the market price significantly; prices are determined by overall supply and demand.
3. Contrast this with other market conditions such as monopoly (where a single firm dominates and sets prices), government-controlled allocation, or collusion (where buyers and sellers fix prices).
4. Identify that the defining feature of competition is the presence of many participants, each acting independently, leading to a market price that reflects collective interactions rather than individual control.
5. Conclude that the correct description of competition is: 'many buyers and sellers interact, each unable to individually influence the market price.'