ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Sellers offer a nearly identical product
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Anyone can start a dairy farm or leave the dairy business at any time
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Many people buy and sell milk
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All of the above
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Detailed explanation-1: -The market for milk closely represents perfect competition. All milk suppliers produce the same good and the price is controlled. Milk farms rarely advertise…. And when they do it is industry wide, not for a specific farm.
Detailed explanation-2: -What Is an Example of Perfect Competition? Consider a farmers market where each vendor sells the same type of jam. There is little differentiation between each of their products, as they use the same recipe, and they each sell them at an equal price.
Detailed explanation-3: -Answer and Explanation: Milk producers operate in a monopolistic market. The dairy market possesses a large number of sellers and a large number of buyers. The size of individual companies is large.
Detailed explanation-4: -The stock market is an example of perfect competition in that everyone has the same chances of ups and downs in a certain market. Laws also help to ensure its perfect competition by making insider trading illegal. In theory, a stock market is perfect competition.
Detailed explanation-5: -Another example of perfect competition, in the Indian context, is sabzi mandis, where equal prices, homogeneous products and elastic demand and supply prevail.