Marcella is a tomato farmer. Under which of the following conditions would she face the most intense competition?
A)Each tomato farmer in the market produces its own hybrid variety of tomato.
B)Marcella is one of 1,200 tomato farmers who sell in the same tomato market.
C)There are six suppliers in the market for the main input used by firms in the tomato market.
D)There is little threat of new entrants into the market.

Question

Quizplus · Accepted Answer

The presence of 1,200 tomato farmers in the same market would result in the most intense competition for Marcella as she would be competing with a large number of suppliers for the same customers, leading to lower prices and lesser profits. The other options do not necessarily indicate intense competition among tomato farmers.

Marcella Is a Tomato Farmer