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Explain the Implications of the Following in a Perfectly Competitive Market : Homogeneous Products. - Economics

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प्रश्न

Explain the implications of the following in a perfectly competitive market :

Homogeneous products.

In a perfectly competitive market, the buyers treat products of all the firms as homogeneous. Explain the significance of this feature

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उत्तर

In a perfectly competitive market, buyers will treat the products of all the firms in the market as homogeneous. There is zero degree of product differentiation and the firm cannot take any control of the price. Here, the firm does not involve in advertisement and sales promotion activities. Hence, uniform price prevails in a perfectly competitive market for homogeneous products.

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