Which of the following statements is true about a competitive market? A competitive market
A) must have a physical location.
B) includes markets for goods and services but not for inputs.
C) has so many buyers and sellers that no one can influence the price.
D) has one seller competing to sell his or her product.
E) has a handful of sellers but always has many buyers.

Question

Quizplus · Accepted Answer

In a competitive market, there are so many buyers and sellers that no one can influence the price. This is because each buyer and seller is a price taker, meaning they must accept the prevailing market price for the good or service being exchanged. It is not necessary for a competitive market to have a physical location, nor does it exclude markets for inputs such as labor or raw materials. A competitive market can have many sellers and many buyers, making it difficult for any one seller to dominate the market.

Which of the Following Statements Is True About a Competitive