NCEA Level 1 Business Studies Practice Test 2025 – The All-in-One Guide to Exam Success!

A market with multiple businesses offering similar products or services is characterized as a competitive market. This type of market is typically defined by a large number of sellers who sell products that are similar but not identical, allowing consumers to have choices. The presence of multiple competitors fosters rivalry, which can lead to better prices, improved quality, and innovation as businesses strive to attract more customers.

In a competitive market, no single company has significant control over the price of the product and consumers benefit from the various options available to them. This structure encourages efficiency and can lead to more favorable outcomes for buyers compared to markets where a single entity dominates.

On the other hand, a monopolistic market consists of only one seller controlling the entire supply of a product, while an oligopoly market has a few large sellers dominating the market. A duopoly is a specific case of an oligopoly, featuring only two sellers. These market structures lack the competitive dynamics seen in a competitive market, where we see multiple businesses vying for consumer attention and loyalty.