Question

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 . true or false: the market for public utilities, like gas and electricity, does exhibit the two primary characteristics that define perfectly competitive markets.
a. True
b. False

Answer 1

Answer: Price takers, False

Explanation:

A perfectly competitive market is a market in which there are a large number of buyers and sellers, there is free entry and exit in this market. The buyers and sellers are price takers in this market.

While, entry in the gas and electricity market is restricted. The firms selling gas and electricity has full control over the price of these two products. Thus, the above statement is false that gas and electricity, does exhibit the two primary characteristics that define perfectly competitive markets.