There are hundreds of companies in the business of providing natural gas to residential users. For the most part, these local gas companies each only serve their local community and so they buy in very competitive markets but sell locally and without competitors. The wholesale market is therefore likely to be

Question

Quizplus · Accepted Answer

The wholesale market for natural gas is characterized by perfect competition due to the presence of hundreds of companies buying natural gas. This large number of buyers ensures no single buyer has market power, and the product (natural gas) is essentially the same regardless of who sells it, meeting key criteria for perfect competition.

There Are Hundreds of Companies in the Business of Providing