State whether the following statement are TRUE and FALSE. 3. Product differentiation is not possible under perfect competition.

State whether the following statement are TRUE and FALSE.

3. Product differentiation is not possible under perfect competition.

Answer:

True


Under perfect competition, the sellers sell goods that are homogeneous in nature. In other words, the product of each and every firm in a perfectly competitive market is a perfect substitute to others’ products in terms of quantity, quality, colour, size, features, etc. Therefore, product differentiation is not possible under perfect competition.

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