Which of the following is an example of a market in the context of competitive markets?

• A. A government agency regulating food safety
• B. A library lending books to members
• C. A classroom where students attend lectures
• D. A farmers' market where buyers and sellers trade fresh produce

Answer: (D)

Verified step by step guidance

1. Understand the definition of a market in microeconomics: a market is any arrangement where buyers and sellers interact to exchange goods or services, typically involving competition among sellers and buyers.
2. Identify the key characteristics of a competitive market: multiple buyers and sellers, free entry and exit, and the exchange of goods or services at mutually agreed prices.
3. Analyze each option to see if it fits the definition of a competitive market: a government agency regulating food safety does not involve buying or selling; a library lending books is a service without competitive buying and selling; a classroom is a place for education, not exchange of goods or services.
4. Recognize that a farmers' market involves multiple buyers and sellers trading fresh produce, which fits the competitive market criteria perfectly.
5. Conclude that the farmers' market example best represents a market in the context of competitive markets because it involves direct transactions between buyers and sellers.