What is a characteristic of a competitive market?

A competitive market is characterized by a large number of small-scale buyers and sellers, which is essential for maintaining competition. In such markets, no single buyer or seller has the power to influence the market price significantly. Each participant acts independently, and their combined actions help determine the equilibrium price and quantity in the market.

The presence of small-scale buyers and sellers ensures that the market remains responsive to changes in supply and demand, promoting efficiency and consumer choice. This structure contrasts with markets having large-scale buyers and sellers, where individual entities may exert more control or market power, leading to potential monopolistic or oligopolistic behaviors.

Moreover, competitive markets typically feature standardized products, where goods offered by different sellers are largely interchangeable, further emphasizing the role of numerous participants, rather than unique products. Additionally, there are generally low barriers to entry, allowing new firms to enter the market easily and enhance competition. High barriers to entry, on the other hand, would hinder competition, isolating the market to fewer participants and potentially resulting in monopoly or oligopoly conditions.