Pure competition is defined by _____________.
A) No differentiation among the products
B) Low marketing communication costs
C) Generally lower profit margins
D) A & B
E) A, B & C

Question

Quizplus · Accepted Answer

Pure competition is characterized by no differentiation among products, which means that consumers perceive them as identical. This creates low marketing communication costs because there is no need to spend money on advertising or promotions to differentiate the products. This also results in generally lower profit margins as there is no pricing power due to the high level of competition. Therefore options A, B, and C are all characteristics of pure competition.

Pure Competition Is Defined by _____________