ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Answer and Explanation: Yes, farming in the United States has the characteristics of perfect competition. It is because many of the prices of firm produce are determined by the market, and farmers have no control in terms of influencing the price of the products.

Detailed explanation-2: -The market for wheat is often taken as an example of a competitive market, because there are many producers, and no individual producer can affect the market price by increasing or decreasing his output. For this reason, each farmer takes the market price as predetermined.

Detailed explanation-3: -Markets for agricultural products like rice, wheat etc resemble perfectly competitive markets because there are a large number of producers, free entry and exit and products are identical.

Detailed explanation-4: -Most agricultural markets are “perfectly competitive, ” meaning (ideally) that a homogeneous product is produced by and for many sellers and buyers, who are well informed about prices. The market is characterized by free entry and exit, with producers obligated to be price takers.