Which of the following is a feature of a purely competitive market?
A) Price differences exist between firms producing the same product.
B) There are significant barriers to entry into the industry.
C) The industry's demand curve is perfectly elastic.
D) Products are standardized or homogeneous.

Question

Quizplus · Accepted Answer

A purely competitive market requires standardized or homogeneous products, meaning that all firms produce identical or nearly identical goods or services. Choice A is characteristic of a monopolistic competition market structure where firms differentiate their products to create some level of product differentiation. Choice B is characteristic of a monopoly where a single firm has complete control of the market and entry is restricted. Choice C is characteristic of a market with a perfectly elastic demand curve, a type of market that does not exist in reality.

Which of the Following Is a Feature of a Purely