In order to have competition in a market economy, there must be Multiple select question. independently actings sellers and buyers in a market. freedom of sellers and buyers to enter or leave markets. sellers and buyers conspiring against each other in a market a board directing buyers and sellers to enter or exit markets government ownership of essential resources
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Competition means that: a) sellers can manipulate market price by causing product scarcities. b) there are independently-acting buyers and sellers in each market. c) a product can be purchased at a number of different prices. d) there is more than one seller in the market.
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The model of competitive markets relies on these three core assumptions: 1. There must be many buyers and sellers—a few players can't dominate the market. 2. Firms must produce an identical product—buyers must regard all sellers' products as equivalent. 3. Firms and resources must be fully mobile, allowing for free entry into and exit from the industry. The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry. Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.
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Why is independent action of buyers and sellers important to achieving perfect competition?
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