Question

The marketplace sets the price for wheat, so farmers who are trying to sell their wheat crops do not need a pricing strategy and do just a little advertising when a crop comes in. The wheat is sold in a(n) __________ type of competitive market.a. oligopolyb. pure monopoly
c. pure competition
d. monopolistic competition
e. monopolistic oligopoly

Answer 1

Answer:

The correct answer is option c.

Explanation:

The only kind of market structure where the price is set by market forces and not the firms is pure competition. The firms in other market structures such as oligopoly, monopoly and monopolistic competition are price setters.  

The market for wheat is a pure competition as there is a large number of sellers who are producing identical products. The firms are price takers and the price is determined by market forces.