Question

If a Florida strawberry wholesaler operates in a perfectly competitive market, that wholesaler will have a ________ share of the market, and consumers will consider her strawberries to be ________. Therefore, ________ advertising will take place in this market.

Answer 1

Answer:

small,

standardized

little, if any

Explanation:

A perfectly competitive market form is characterized by the following:

• Large number of buyers and sellers: The number of sellers is so large that the output of a single seller is insignificant w.r.t the total industry output.
• Homogeneous products: Firms produce exactly similar or homogeneous products w.r.t color, size or attributes.
• Free entry and exit: There are no entry barriers so new firms can join the industry while loss making firms exit the industry.
• Price takers: Since all sellers offer same products, the price is determined by the interaction of market forces of demand and supply and thus each firm represents a price taker.
• Perfect knowledge on part of buyers

In the given case, since the strawberry wholsaler operates in a perfectly competitive market, she will have small and insignificant share of the market which means she cannot influence the price individually.

Also since all sellers sell the same product i.e strawberry, consumers will consider her strawberries to be standardized and there is little scope of advertising.