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

• A. The market for electricity distribution
• B. The market for wheat
• C. The market for commercial airplanes
• D. The market for operating systems

Answer: (B)

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 market option based on these characteristics. For example, electricity distribution often has few providers and high entry barriers, making it less competitive.
3. Step 3: Consider the market for wheat. It usually has many farmers selling a standardized product with relatively easy entry and exit, fitting the competitive market criteria.
4. Step 4: Evaluate the market for commercial airplanes, which is dominated by a few large firms with differentiated products and high entry barriers, indicating an oligopoly rather than perfect competition.
5. Step 5: Look at the market for operating systems, which is typically dominated by a few firms with differentiated products and significant barriers to entry, also not fitting the competitive market model.