EBK MICROECONOMICS
2nd Edition
ISBN: 9780134458496
Author: List
Publisher: VST
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Question
Chapter 6, Problem 1Q
To determine
Whether the given market is competitive or not.
Expert Solution & Answer
Explanation of Solution
It is given that a firm has
Thus, in this question, the presence of one such big firm that can influence the market price due its large share in the global market. Hence, a large number of sellers in a market will not automatically ensure that it is competitive; it is the share of output that each firm produces that matters the most.
Economics Concept Introduction
Perfectly competitive market is a market where there are many sellers and buyers of a particular good in the market. Hence, due to this large number, each seller and buyer has a very small share in changing the market output; therefore, the market price remains uninfluential by action of an individual seller or buyer.
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