This solution gives a correct answer and description on the following problems: Is a market confined to all firms and individuals willing and able to buy or sell a particular product at a given time and place? Will the even balance of power between sellers and buyers result to a competitive process that will yield maximum benefits? Is the close link between the numbers of market participants and the vigor of price competition always evident? Does a Market structure describes the competitive environment in the market for any good or service? Do competitors benefit from the effects of potential entrants in industries with only a handful of viable firms?
A. A market is confined to all firms and individuals willing and able to buy or sell a particular product at a given time and place.
True. There is transaction whenever buyers and sellers interact.
B. The more even the balance of power between sellers and buyers, the more likely it is that the competitive ...
This solution is comprised of a brief discussion of the Market Structure and its Relation to Price and Competition.
It discusses how the market will behave given the type of structure, the price level and the number of players in the economy.