Which of the products below is closest to operating in a perfectly competitive industry?a. Nike shoesb....
Which of the products below is closest to operating in a perfectly competitive industry?
a. Nike shoes
b. Cotton
c. Perdue Chicken
d. Restaurants
Homework Answers
A market is said to be a perfectly competitive when there exists large number of sellers and buyers.
The other characteristic that defines perfectly competitive market is that all the firms in the industry sell same product at a uniform price.
In a perfectly competitive market, there are no substitutes as all the firms sell homogeneous products. The products like N shoes, P chicken and Restaurants have many close substitutes available and therefore violating the condition of a perfectly competitive market.
Hence, the incorrect alternatives are (a), (c) and (d).
The agricultural products are the best examples of a perfectly competitive market. Since, cotton is an agricultural product; therefore, it is operating in a closely perfectly competitive industry.
Therefore, the correct answer is option 
is the correct answer.
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