Which of the following is a characteristic of perfect competition?

In a perfectly competitive market, one defining characteristic is the presence of homogeneous products. This means that the products offered by different firms are identical or nearly identical from the viewpoint of consumers. As a result, consumers have no preference for one seller’s product over another, leading to competition based primarily on price. Firms cannot charge higher prices without losing all their customers to competitors, which enforces a market equilibrium where prices tend to reflect the marginal cost of production.

This characteristic of homogeneity contributes to the overall efficiency of the market. Since the products are the same, it enhances consumer choice and encourages firms to operate efficiently to minimize costs and maximize production. Combined with other characteristics of perfect competition, such as many buyers and sellers and the ease of entry and exit from the market, homogeneous products help ensure that no single firm can significantly influence the market price.