Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Homogeneous products
B
Significant barriers to entry
C
Price discrimination
D
Few sellers
Understanding the Answer
Let's break down why this is correct
Answer
In a perfectly competitive dairy market, many farmers produce similar products, like milk, and none can control the price. This means that if one farmer tries to charge more, customers will simply buy from another farmer offering a lower price. For example, if Farmer A sells milk for $3 a gallon and Farmer B sells it for $2. 50, customers will choose Farmer B because they want the best deal. Additionally, all farmers have easy access to information about prices and production methods, so they can make informed choices.
Detailed Explanation
In perfect competition, all products are the same. Other options are incorrect because Some might think there are big obstacles to start selling milk; People might believe sellers can charge different prices for the same milk.
Key Concepts
characteristics of perfect competition
Topic
Perfect Competition in Dairy Markets
Difficulty
easy level question
Cognitive Level
understand
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