Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
7th Edition
ISBN: 9781285165950
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 4, Problem 1QR
To determine

Competitive Market.

Expert Solution & Answer
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Explanation of Solution

A competitive market refers to a market where there are many buyers and many sellers of an identical product and each of whom has little or no impact on the market price. Market price in a competitive market is determined by the demand and supply of the product. However, there are other markets that are not perfectively competitive. For instance, in the monopoly markets, there is only a single seller who is the price setter. There are also other markets that fall between the extremes of perfect competition and monopoly.

Economics Concept Introduction

Concept Introduction:

Competitive Market: It refers to the market in which there are many buyers and many sellers of an identical product so that each has a negligible impact on the market price.

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