Question

There are more than 20 stores on the same street that specialize in selling the same quality and brand of wheat products. An individual seller cannot charge more than the going rate without risk of losing business to other stores. What type of market does this exemplify?

Answer 1

Answer:

Pure competition

Explanation:

• Pure competition is a market structure in which many competitors sell many similar products. Due to high competition, market prices will fall. Pure competition is also called full competition. Other characteristics of pure competition.
• There are many buyers and many sellers for market information
• There are no entry and exit barriers in the market
• Companies sell homogeneous products
• Firms cannot affect market value. Companies are price takers.
• Production units are identical and operate independently.