Which of the following is a characteristic of competitive markets?
A) Consumers know very little about product attributes and prices.
B) The demand for goods and services is highly inelastic.
C) Producers are compelled to respond to price decreases.
D) There are relatively few producers selling similar products.

Question

Quizplus · Accepted Answer

In competitive markets, producers are compelled to respond to price decreases to stay competitive and maintain their market share. This is because there are many producers selling similar products, making it easy for consumers to switch to a competitor if the prices are too high. This results in a constant pressure on producers to keep prices low, and any increases can lead to a loss of market share.

Which of the Following Is a Characteristic of Competitive Markets