Broadly deﬁned, competition involves
A) private property and freedom of expression.
B) independently acting buyers and sellers and freedom to enter or leave markets.
C) increasing opportunity costs and diminishing marginal utility.
D) capital goods and division of labor.

Question

Quizplus · Accepted Answer

Competition involves independently acting buyers and sellers who are free to enter or leave markets. This is because competition is essentially the process of market forces driving prices towards equilibrium, which can only occur when there is freedom of entry and exit to the market. While private property and freedom of expression may be important aspects of a free market system, they are not necessary conditions for competition. Likewise, increasing opportunity costs and diminishing marginal utility are economic concepts, but not specific to competition. The same can be said for capital goods and division of labor.

Broadly Deﬁned, Competition Involves