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In a perfectly competitive market, all producers sell identical goods or services. Additionally, there are few buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are pricetakers .

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This question is fill in the blanks.So there is a total of 3 sentences in this question.
1. In a perfectly competitive market, all producers sell identical goods or services. - One of the characteristics of a perfect competition.  This means that the product must be indistinguishable from anycompetitor's product.
2.  Additionally, there are many buyers and sellers.  – any one firm’s output in contrast to the market output is gradual and what one firm does has no affect on other firms.
3. Buyers and sellers in perfectly competitive markets are price takers. - This means that  they accept the price offered in stores.

In a perfectly competitive market, all producers sell identical goods or services. Additionally, there are many buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are price takers.

Further Explanation  

Perfectly competitive market  

  • This is a type of market structure that is hypothetical and is considered to have a very high level of competition.  

Characteristics of perfectly competitive market  

  1. No barriers of entry or exit to the market  
  2. Goods produced by firms are identical  
  3. Units of input such as units of labor are also identical  
  4. A single cannot influence the market price or prevailing market conditions.
  5. There are many buyers and sellers  
  6. Buyers and sellers make normal profits in long run
  7. Buyers and sellers are price takers  
  8. There is perfect knowledge by the consumers and sellers

Other types of market structures  

Monopolistic competition  

  • It is a market structure that has many small firms competing against each other.
  • These firms sell similar products that are slightly differentiated in terms of branding, packaging, etc.

Assumptions of monopolistic competition  

  1. Free entry and exit to the market  
  2. Products are differentiated  
  3. Consumer’s preference is applicable  
  4. All firms maximize profits  

Oligopoly  

  • A market structure that is dominated by few firms thus there is limited competition.  

Assumptions  

  1. Products may identical or differentiated  
  2. Firms maximize profit  
  3. There is only few firms in the market  
  4. There is barriers to market entry or exit  
  5. Firms can set their prices  

Monopoly  

  • A type of market structure where there is a single producer and many buyers.
  • A single firm controls the market as it has the highest market power and consumers lack other options.  

Assumptions  

  1. Monopolist maximizes the profit  
  2. Monopoly sets the price  
  3. High barriers to exit and entry to the market  
  4. A sole firm dominates and controls the market  

Keywords: Market structure, perfect competition market

Learn more about:

  • Perfect competition market: https://brainly.com/question/3317389
  • Assumptions in perfect competition market: https://brainly.com/question/12178414
  • Types of market structures: https://brainly.com/question/10442192

Level: High school  

Subject: Business  

Topic: Market structures  

Sub-topic: Perfect market structure  

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