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Question
Identify the market form and explain the corresponding feature, as given in the following statement:
"The commodity in this market has attributes which are identical for sellers and buyers."
Solution
The market referred here "The commodity in this market has attributes which are identical for sellers and buyers" is Perfect Competition.
This implies that all the firms in the perfect competitive market produce homogeneous products. This further implies that the product of each and every firm in the market is a perfect substitute to others’ products in terms of quantity, quality, colour, size, features, etc. This indicates that the buyers are indifferent between the products of different firms. Due to the homogeneity of the products, the existence of a uniform price is guaranteed.
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