7.1 Perfect Competition

Open Ended

What type of competition do you face in your daily life? How is competition related to economics?

Multiple Select

What are the conditions of a perfectly competitive market? (Check all that apply)

• many buyer and sellers

• sellers offer identical products

• buyers and sellers are well informed about products

• seller are able to enter and exit the market freely

Match

Match the correct terms.

• a market structure in which a large number of firms all produce the same product

• a product that is the same no matter who produces it

• any factors that make it difficult for new firms to enter a market

• market structure that does not meet the conditions of perfect competition

perfect competition

commodity

barrier to entry

imperfect competition

• perfect competition

• commodity

• barrier to entry

• imperfect competition

Multiple Choice

Which of the following is an example of pure competition?

• jewelery

• oranges

• art

• antiques

Multiple Choice

Which of the following is an example of a barrier to entry?

• start-up costs

• government regulation

• excess monetary funds

• commedities

Multiple Choice

Why must perfectly competitive markets always deal in commodities?

• entrepreneurial costs

• identical products are required

• products are limited to supply

• issues with barriers to entry

Multiple Choice

All of the following are conditions for perfect competition except ____________.

• buyers must follow government regulation

• sellers offer identical products

• buyers and sellers are well informed on products

• sellers are able to enter and exit freely

Multiple Choice

___________ is a market structure that does not meet the conditions of perfect competition.

• Commodities

• A disequilibrium

• Imperfect competition

• Price supports in industry