Question

Which of the following best summarizes why firms in purely competitive industries do not differentiate their products?

Multiple choice question.

Because there is not enough demand for differentiated products

Because there are so many of them selling a standardized product

Because there are so many of them selling a non-standardized product

Because of scarce resources that limit the production of alternative products

Answer 1

In purely competitive industries, firms do not differentiate their products because there are so many of them selling a standardized product.

Step-by-step explanation:

In purely competitive industries, firms do not differentiate their products because there are so many of them selling a standardized product. In a perfectly competitive market, there are numerous sellers offering identical products, which leads to intense competition based on price.