Although there are many reasons why a market can be non-competitive, the principal economic difference between a competitive and a non-competitive market is:
A) the number of firms in the market.
B) the extent to which any firm can influence the price of the product.
C) the size of the firms in the market.
D) the annual sales made by the largest firms in the market.
E) the presence of government intervention.

Question

Quizplus · Accepted Answer

In a competitive market, no single firm has enough market power to influence the price of the product. In a non-competitive market, one or more firms have enough market power to influence price, often resulting in higher prices and reduced output. The other options, such as the number or size of firms in the market or government intervention, may be contributing factors to the lack of competition but they are not the principal economic difference between competitive and non-competitive markets.

Although There Are Many Reasons Why a Market Can Be