Question

In a perfectly competitive market, all producers sell goods or services. Additionally, there are buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are price . True or false: the market for digital cable does not exhibit the two primary characteristics that define perfectly competitive markets.
a. True
b. False

Answer 1

Answer: True, False

Explanation:

Perfectly competitive market is governed by the following characteristics,

a. Identical/homogeneous goods

b. Large number of buyers and sellers

c. Free entry and exit

d. Perfect information

Therefore, the above statement is true that in a perfectly competitive market, all producers sell identical goods or services. Additionally, there are many buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are price takers.

The market for digital cable does exhibit the two primary characteristics that define perfectly competitive markets. Firms in a digital cable market have to sell the same product (like the channels they offer), they need to set the same price. Thus, the statement is false.

Answer 2

Because of these two characteristics (availability of buyer & seller and buying and selling of goods), both buyer and sellers in perfectly competitive market are price $\fbox{takers}$.

The market for digital cable does not exhibit the two primary characteristics that define perfectly competitive. The statement is true.

Further Explanation:

Perfect Competition: The perfectly competitive markets are those markets where there are many sellers and buyers selling identical goods and services. There are barriers to entry and exit. The firm cannot influence the price. The firms are price takers.The characteristics of the perfect competition are:

• Many buyers and sellers

• No barriers to exit and entry

• Homogenous products

• Firms are a price taker

Therefore, the perfectly competitive market is one in which all the producers sell the same product or services. There are many sellers and buyers; so no one can influence the price, and all the firms are price takers.

The market for digital cable does not exhibit the two primary characteristics that define perfectly competitive because there are few sellers and many buyers. The pricing of the services offered is also different.

Learn more:

1. Market intermediaries' role in the distribution of goods

brainly.com/question/9727245

2. Marketing mix

brainly.com/question/7578155

3. Current market price

brainly.com/question/2289757

Answer details:

Grade: High School

Subject: Economics

Chapter: Market types

Keywords: A perfectly competitive market, identical goods or services, many buyers and sellers. two characteristics, both buyers and sellers, price takers, market for digital cable, primary characteristics, perfectly competitive, true.