Beef Producers Association

competitive market economy question?

A hypothetical economy manufactures two types of meat: beef and pork. Publicity about mad cow disease causes a change in consumers’ tastes away from beef and towards pork. Consumers and meat producers are both price-takers.

True or False: The economy described above is a competitive market economy.

A – True
B – False
C – Cannot conclude

C.

Price Taker: investor whose buying or selling transactions are assumed to have no effect on the market