Dynamics of Perfect Markets Economics Grade 12 Questions and Answers. The key characteristics of perfect competition are that there are a large number of firms, and the products are homogeneous and identical. The consumer has no reason to express a preference for any particular firm because of this. There is freedom of entry and exit into and out of the industry or market.
THE DYNAMICS OF PERFECT MARKETS QUESTIONS AND ANSWERS
Activity 1
Study the diagram below and answer the questions that follow.
- Define the concept market structure. (2)
- How many sellers will one find in a monopoly market? (2)
- In what market are all participants price-takers? Motivate your answer. (4)
- Explain the shape of the individual demand curve under perfect competition. (4)
- Under which market structure will you place the following businesses?
- KFC
- Eskom
- Vodacom (6)
- Explain in your own words the message behind the pie-charts shown above. (4)
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Answers to activity 1
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