What describes the competitive market best? (a) Firms cooperate in setting the price of a good. (b) One firm controls production of all goods in an industry. (c) There are many buyers and sellers of the same good. (d) The government controls the allocation of inputs in production.

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What describes the competitive market best? (a) Firms cooperate in setting the price of a good

Economics Dec 18, 2020

What describes the competitive market best?

(a) Firms cooperate in setting the price of a good.

(b) One firm controls production of all goods in an industry.

(d) The government controls the allocation of inputs in production.

Expert Solution

The answer is (C). In competitive markets, no one can control price and there are many sellers. if the government controls the input, then the government is effectively a monopoly in the market.

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