Which market structure has many firms, no market power, a homogenous/identical product and is very easy to enter?

Question

BlackTom AI · Accepted Answer

Perfect competition is characterized by many firms selling an identical product, each firm being a price taker, and free entry and exit.

1. Relevant knowledge points and concepts
- Number of firms: “many” firms in the market so no single firm can influence market price.  
- Product homogeneity: products are identical (perfect substitutes), so consumers are indifferent to the seller.  
- Market power: individual firms have no market power and must accept the market price (price takers).  
- Ease of entry/exit: “very easy to enter” implies negligible barriers (no legal, technological, or scale barriers).  
These are the defining conditions of perfect competition.

2. Step-by-step reasoning
- The question lists four features: many firms, no market power, identical product, and very easy entry.  
- Match each feature to market structures: perfect competition, monopolistic competition, oligopoly, monopoly.

3. Intermediate logic steps (explicit mapping)
- Monopoly: one firm, unique product, significant market power, high barriers → does not match.  
- Oligopoly: few dominant firms, interdependent pricing, barriers to entry → does not match.  
- Monopolistic competition: many firms and easy entry (matches two), but products are differentiated and firms have some market power → fails the “identical product” and “no market power” requirements.  
- Perfect competition: many firms (yes), identical/homogeneous product (yes), no market power (firms are price takers, yes), very easy entry/exit (yes) → matches all features.

4. Why the correct answer is correct
Because perfect competition uniquely satisfies all four listed characteristics simultaneously: identical product ensures no firm can charge above market price, many firms and price-taking behavior mean no market power, and free entry/exit ensures long-run zero economic profit, consistent with “very easy to enter.”

5. Why other options are incorrect (brief)
- Monopoly (a): fails because there is one firm, high market power, and high entry barriers.  
- Monopolistic competition (c): fails because products are differentiated (not identical) and firms have some price-setting power.  
- Oligopoly (d): fails because there are few firms, interdependence, and typically entry barriers.

6. Conclusion confirming the answer
All conditions point to perfect competition. Therefore the correct answer is b. Perfect competition, which matches the provided answer.

Which market structure has many firms, no market power, a homogenous/identical product and is very easy to enter?单项选择题

类似问题

A market structure in which there is only one supplier and there are substantial, potentially insurmountable, barriers to new entrants is known as:

Which of the following best describes a market where dealers provide liquidity by buying and selling stocks for themselves?[Fill in the blank]

When two or more large firms form a cartel, the price of products would_ and the output would_. This collusive behaviour more likely leads to a/an____ in the level of efficiency.

A perfectly competitive firm is said to be more efficient than a monopoly firm because

A perfectly competitive firm is said to be more efficient than a monopoly firm because

According to the video, which market structure category is the car market best described as?

Which market structure has -a small number of firms, each with high level of market power; -high barriers to entry, making it difficult for new firms to enter; and -mutual interdependence among firms?

The threat of competitors’ entering a market is very high in industries that perform a(n) _ role and in industries where the primary product or service is _.

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单

Which market structure has many firms, no market power, a homogenous/identical product and is very easy to enter?单项选择题

类似问题

A market structure in which there is only one supplier and there are substantial, potentially insurmountable, barriers to new entrants is known as:

Which of the following best describes a market where dealers provide liquidity by buying and selling stocks for themselves?[Fill in the blank]

When two or more large firms form a cartel, the price of products would_______ and the output would_______________. This collusive behaviour more likely leads to a/an____________ in the level of efficiency.

A perfectly competitive firm is said to be more efficient than a monopoly firm because

A perfectly competitive firm is said to be more efficient than a monopoly firm because

According to the video, which market structure category is the car market best described as?

Which market structure has -a small number of firms, each with high level of market power; -high barriers to entry, making it difficult for new firms to enter; and -mutual interdependence among firms?

The threat of competitors’ entering a market is very high in industries that perform a(n) _____ role and in industries where the primary product or service is _____.

更多留学生实用工具

希望你的学习变得更简单

When two or more large firms form a cartel, the price of products would_ and the output would_. This collusive behaviour more likely leads to a/an____ in the level of efficiency.

The threat of competitors’ entering a market is very high in industries that perform a(n) _ role and in industries where the primary product or service is _.