Identical products, as well as a large number of buyers and sellers, are characteristics of a monopolistic market. in such markets, sellers of goods cannot influence the prevailing market price, giving them the role of price in the market. true or false: the market for lettuce does not exhibit the two primary characteristics that define perfectly competitive markets.

It is  false that the market for lettuce does not exhibit the two primary characteristics that define perfectly competitive markets.

Perfectly competitive markets is the condition where the large numbers of buyers and sellers who cannot influence market prices and buy and sell identical products.   Perfectly competitive markets also the condition in where a large number of firms produce the same product. Perfect competition describes a market structure where competition is at its greatest possible level. In perfect competition a firm is a price taker because other firms can enter the market easily and  other firms can produce a product that is indistinguishable from every other firm's product. This makes impossible for any firm to set its own prices.

Although in reality, most markets do not perfectly adhere to the assumptions of the perfectly competitive markets, some markets are very close to perfect competition. For example, the market for lettuce has millions of consumers who buy lettuce, as well as thousands of farmers producing and selling lettuce.  These consumers and producers take the market price as given, and make their production and consumption decisions based on these prevailing price.

Grade:  9

Subject:  business

Chapter:  perfectly competitive markets

Keywords:  perfectly competitive markets

The given statement is not correct. The market for lettuce has the primary two characteristics of the perfectly competitive market.

Further Explanation:  

Monopolistic competition:

Monopolistic competition refers to the market which consists of a large number of buyer and seller. The seller offers a similar product but not a perfect substitute. The sellers offer different products from one another and charge the customer accordingly. Therefore, the seller or the manufacturer in the monopolistic competition can influence the price in the market by providing a different product. Following are the characteristics of monopolistic competition:

• A large number of sellers

• Identical product

• Easy entry and exit

• Price taker

Explain whether the given statement is correct or incorrect:

The statement states that the lettuce market does not have the primary two characteristics of the perfectly competitive market. The two primary characteristics of the perfectly competitive market are as follows:

• Identical product

• A large number of buyer and seller

The lettuce market is carried out by the thousands of farmers who engage in the production of the lettuce, and the thousands of buyer buys the product. The product offered is almost the same, which “lettuce.”  

Therefore, the given statement is not correct. The market for lettuce has the primary two characteristics of the perfectly competitive market.

Learn More:

1. Learn more about the perfect competition

2. Learn more about the product leadership

3. Learn more about the demand and supply

Answer Details:

Grade: Middle school

Chapter: Types of market

Subject: Economics

Keywords: Identical, products, large, number, buyers, and sellers, characteristics, monopolistic market, sellers of goods, influence, prevailing, market price, giving, price in the market, true or false, market, lettuce, exhibit, two, primary, characteristics, perfectly competitive markets.

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