Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 9 - Perfect Competition - Exercises - 9.1 Preview of the Four Market Structures - Page 228: 1.5

Answer

competitive

Work Step by Step

Perfectly competitive markets have homogeneous products and no barriers to entry. Perfect competition requires easy entry and exit from the market, many buyers and sellers, and a standardized product. The low initial investment makes entry easy, satisfying one key condition of perfect competition. In Pakistan, the market for phone service is perfectly competitive because a person can enter the market with a relatively small initial investment—only $310.
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