Prices are set by the competitive market when
A) the product is specially made for a customer.
B) there are no other producers capable of manufacturing a similar item.
C) a company can effectively differentiate its product from others.
D) a product is not easily distinguished from competing products.

Question

Quizplus · Accepted Answer

In a competitive market, prices are determined by the forces of supply and demand rather than by individual producers or sellers. When a product is not easily distinguished from competing products, it means that there are many similar products available, leading to a situation where no single seller has significant control over the market price. This scenario is characteristic of a perfectly competitive market, where numerous sellers offer essentially identical products, and the price is set by the overall market dynamics.

Prices Are Set by the Competitive Market When