Q3 2 Points Which of the following does not characterize a competitive market? A few firms No market power Identical products Marginal cost equals price
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A competitive market is characterized by many firms, not just a few. Show more…
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One key difference between an oligopoly market and a competitive market is that oligopolistic firms are price takers while competitive firms are not. Oligopolistic firms sell their product at a price equal to marginal cost while competitive firms do not. Oligopolistic firms can affect the profit of other firms in the market by the choices they make while firms in competitive markets do not affect each other by the choices they make. Oligopolistic firms sell completely unrelated products while competitive firms do not.
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Classify the following markets as perfectly competitive, monopolistic, or monopolistically competitive, and explain your answers. a. wooden no. 2 pencils b. copper c. local electricity service d. peanut butter e. lipstick
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