Which of the following does competition in a market require?

• A. A single seller dominating the market
• B. Barriers to entry for new firms
• C. Government price controls
• D. A large number of buyers and sellers

Answer: (D)

Verified step by step guidance

1. Understand the concept of competition in a market: Competition typically requires many buyers and sellers so that no single participant can control the market price.
2. Analyze each option in the context of competition: A single seller dominating the market implies a monopoly, which is the opposite of competition.
3. Consider barriers to entry: High barriers to entry reduce competition by preventing new firms from entering the market.
4. Evaluate government price controls: These are interventions that can distort competition rather than promote it.
5. Conclude that competition requires a large number of buyers and sellers to ensure no single entity can influence prices, leading to a competitive market environment.