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Question
State whether the following statement is TRUE and FALSE.
Product differentiation is not possible under perfect competition.
Options
True
False
MCQ
True or False
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Solution
True
Under perfect competition, the sellers sell goods that are homogeneous in nature. In other words, the product of each and every firm in a perfectly competitive market is a perfect substitute to others’ products in terms of quantity, quality, colour, size, features, etc. Therefore, product differentiation is not possible under perfect competition.
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