Which condition will encourage competition?
A)government licensing requirements in order to enter an industry
B)a small number of buyers and sellers in a market
C)the freedom of sellers and buyers to enter or exit an industry
D)the government serving as the only supplier of goods to consumers

Question

Quizplus · Accepted Answer

The freedom of sellers and buyers to enter or exit an industry creates an opportunity for new businesses to enter the market which increases the number of competitors. This will lead to increased competition among sellers, resulting in better quality products, lower prices, and improved customer service. Having government licensing requirements or the government serving as the only supplier of goods to consumers will limit the number of sellers in the market, reducing competition. A small number of buyers and sellers in a market may not necessarily encourage competition due to the limited number of players in the market.

Which Condition Will Encourage Competition