Question

Which of the following statements describes a competitive market?

1. There are a large number of buyers and sellers.
2. The number of sellers is limited to a select few.
3. Government does not intervene in any way.
4. Businesses follow government guidelines on what items to produce.

Answer 1

A competitive market is characterized by a large number of buyers and sellers, where sellers offer identical products and both buyers and sellers are well-informed about products.

Step-by-step explanation:

A competitive market is characterized by a large number of buyers and sellers, where sellers offer identical products and both buyers and sellers are well-informed about products. In a competitive market, businesses do not follow government guidelines on what items to produce and government does not intervene in any way.