ECONOMICS
MARKET FAILURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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shoes
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wheat
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bottled water
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personal computers
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Detailed explanation-1: -Answer and Explanation: The correct answer is e. wheat farming. Wheat farming is a perfectly competitive market because the products are identical, there are no barriers to entry, and competition is fierce between producers who are price takers.
Detailed explanation-2: -The best examples of a purely competitive market are agricultural products, such as corn, wheat, and soybeans. Monopolistic competition is much like pure competition in that there are many suppliers and the barriers to entry are low.
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: -1. Which of the following are most likely to be perfectly competitive? Answer: A perfectly competitive market is approximated most closely by a highly organized market.