Practice Quiz

Praxis II Citizenship

Category - Economics

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In a market structure with perfect competition:
  1. There are many sellers, substitutes, well-educated buyers, and opportunities for all parties.
  2. One seller has a monopoly on a particular product market.
  3. One seller consistently outperforms its competitors over an extended period of time.
  4. Resources and currency are distributed equally by a centralized power.
Explanation
Answer: D - In a market structure with perfect competition, there are many sellers, substitutes, well-educated buyers, and opportunities for all parties. In markets with perfect or near-perfect competition, exchange is dictated by supply and demand, which facilitates competition. New sellers can readily enter the market. Buyers are well informed, and they have a variety of sellers and substitute products from which to choose when shopping, which forces sellers to compete to the buyers’ advantage.
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