What Happens in a Competitive Market

question 213

Multiple Choice

What happens in a competitive market?

• A) Only a few sellers sell the same product.
• B) Each seller has limited control over the price of his product.
• C) If one buyer chooses to purchase a large quantity of the product, the price will rise.
• D) If one seller withholds his product from the market, prices will rise.

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Definitions:

Federal Reserve

The central banking system of the United States, responsible for implementing monetary policy, supervising banks, and providing financial services.

Bill of Exchange

A written, unconditional order by one party (the drawer) to another (the drawee) to pay a certain sum, either immediately (a sight bill) or on a fixed date (a term bill), to a third party (the payee) or to bearer.

Draft

A draft refers to the compulsory enrollment of individuals into military service, or can refer to the preliminary version of a document or plan.

Payee

The person or entity to whom a check, draft, or promissory note is made payable.