Question

True or false: the market for digital cable does not exhibit the two primary characteristics that define perfectly competitive markets.

Answer 1

False. The market for digital cable does not exhibit the two primary characteristics that define perfectly competitive markets. A perfectly competitive market is a theoretical market structure because the firms have to meet specific criteria to be considered a perfectly competitive market. The firms have to sell the same product (which digital cable varies in what packages and channels they offer), they need to set the same price and they are unable to allow the market shares to determine their prices.

Answer 2

The answer is false. The market for digital cable exhibit the two primary characteristics that define perfectly competitive markets. The two primary characteristics are: There is perfect knowledge, with no information failure or time lags in the flow of information and , it is assumed that they make rational decisions to maximise their self interest. Both characterics are achieve. That is why the answer us false.