Which characteristic of competitive markets is mainly responsible for ensuring that prices will be kept low?
A) many buyers
B) many sellers
C) similar goods
D) easy entry into and exit from the market
E) differentiated goods

Question

Quizplus · Accepted Answer

Easy entry into and exit from the market ensures that prices will be kept low because it allows new firms to enter the market if prices are too high, and allows existing firms to exit the market if prices are too low. This competition keeps prices in check.

Which Characteristic of Competitive Markets Is Mainly Responsible for Ensuring