JAMB 2015 Economics · Question 66

The market in which the operators are many and none of them can influence the price is

Options

  1. A.stock exchange market
  2. B.imperfect market
  3. C.perfect market
  4. D.exchange market

Answer: C. perfect market

Explanation written with AI and checked against the answer key

Step 1: Analyze the question The question describes a market with two key features:

  • There are many operators (many buyers and sellers).
  • No single operator can influence the price.

Step 2: Explain the concept A perfect market (perfect competition) has these characteristics:

  • A very large number of buyers and sellers
  • Homogeneous (identical) products
  • Free entry into and exit from the market
  • Perfect knowledge of market conditions
  • Perfect mobility of factors of production

Because each seller is so small relative to the whole market, no one can change the price alone. Each firm is a price taker, and the price is set by the overall forces of demand and supply.

Step 3: Check the options

  • A. Stock exchange market: This is a place for trading shares and securities. It is not defined by the "no one influences price" feature.
  • B. Imperfect market: In this market, some buyers or sellers (such as a monopolist or oligopolist) have some power to influence price. This is the opposite of the description.
  • C. Perfect market: Many operators, and none can influence the price. This matches.
  • D. Exchange market: This is a general term for trading currencies or goods. It is not the defining term here.

Step 4: Answer The correct answer is C. perfect market.

Exam tip: When you see "many buyers and sellers" together with "price taker" or "no one can influence price," think perfect competition. When you see "one seller" or "few sellers" with price control, think imperfect competition (monopoly or oligopoly).

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