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Question about Perfect Competition

Subject Economics

Economics

Source Originais Teachy

Originais Teachy

Topic Perfect Competition

Perfect Competition

Difficulty Easy

Easy

(Originais Teachy 2023) - Question Easy of Economics

Imagine a town where everyone is a farmer, and they all grow and sell the same type of apple. There are no restrictions for any new farmers to enter the market and start selling apples, and likewise, there are no restrictions for any existing farmers to leave the market if they decide to stop selling apples. Given this scenario, what market structure does this town's apple market represent, and how does it affect the price of apples?

The market structure represented in this town's apple market is 'Monopolistic Competition', and it affects the price of apples by allowing each farmer to set their own price based on their unique product.

The market structure represented in this town's apple market is 'Oligopoly', and it affects the price of apples by allowing a few dominant sellers to influence the price.

The market structure represented in this town's apple market is 'Monopoly', and it affects the price of apples by allowing the single seller to control the price.

The market structure represented in this town's apple market is 'Perfect Competition', but it does not affect the price of apples as the price is set by a regulatory body.

The market structure represented in this town's apple market is 'Perfect Competition', and it affects the price of apples by constantly adjusting based on the forces of supply and demand.

Answer sheet:

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