Which of the following is not a characteristic feature of imperfect competition?a)Prices vary from seller to sellerb)All the products are homogeneousc)Profits of the seller is included in the priced)None of aboveCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

Imperfect competition is a competitive market situation where there are many sellers, but they are selling heterogeneous (dissimilar) goods as opposed to the perfect competitive market scenario. As the name suggests, competitive markets that are imperfect in nature.

Answer

Imperfect competition is a competitive

Answer

Imperfect competition refers to a market structure in which there are multiple sellers and buyers, but the market is not perfectly competitive. In imperfect competition, there are certain characteristics that differentiate it from perfect competition. The characteristic feature that is not present in imperfect competition is that all the products are homogeneous (option B).

Explanation:
1. Prices vary from seller to seller: In imperfect competition, sellers have the ability to set their own prices based on factors such as production costs, market demand, and competition. This means that different sellers in the market can charge different prices for their products or services.

2. Profits of the seller is included in the price: In imperfect competition, sellers are able to include their desired profit margin in the price they charge for their products. This allows sellers to earn profits based on the market demand and the costs associated with producing their products or services.

3. Not all the products are homogeneous: Unlike perfect competition, where all the products are identical or homogeneous, imperfect competition allows for product differentiation. This means that sellers in an imperfectly competitive market can offer products that have differentiated features, quality, branding, or other unique characteristics. This differentiation enables sellers to have some degree of market power and control over their pricing strategy.

4. None of the above: This option is incorrect because the question specifically asks for the characteristic feature that is not present in imperfect competition. Since all the other options (prices vary from seller to seller and profits of the seller are included in the price) are characteristic features of imperfect competition, the correct answer is option B.

In summary, imperfect competition is characterized by varying prices from seller to seller and the inclusion of seller profits in the price. However, unlike perfect competition, not all products are homogeneous in imperfect competition. This product differentiation allows sellers to have some level of control over their pricing strategy and gives them the ability to offer unique products to differentiate themselves from competitors.

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