Question

Identical products, as well as a large number of buyers and sellers, are characteristics of a market. In such markets, sellers of goods influence the prevailing market price, giving them the role of price in the market. True or False: The market for public utilities, such as gas and electricity, exhibits the two primary characteristics that define perfectly competitive markets. True False

Answer 1

Answer: False

Explanation: In simple words, perfectly competitive markets refers to the markets in which there are large number of sellers operating at a small level. The products offered by the participants are similar and there is no scope of earning unlimited profits.

The public utilities such as electricity and water is usually maintained by the govt. itself or by a private institution under the complete guidance from govt. It is seen as a monopoly market.

Hence the given statement is false.