In a competitive market,

Question

Quizplus · Accepted Answer

In a competitive market, no single buyer or seller can influence the price of the product. This is because there are numerous buyers and sellers, and none of them have enough market power to affect the equilibrium price. Option B is incorrect because a small number of sellers would indicate an oligopoly market. Option C is incorrect because in a competitive market, the goods offered by different sellers are usually similar or identical, which is known as product homogeneity. Option D is incorrect because accounting profit is not necessarily driven to zero in a competitive market; only economic profit is driven to zero as new firms enter the market and compete for profits.

In a Competitive Market