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The Market for Shampoo Has 600 Producers with No Barriers

Question 48

Multiple Choice

The market for shampoo has 600 producers with no barriers to entry. Price information is easily available to both buyers and producers. There are, however, variations in the features and ingredients of the shampoo across the producers. The biggest producer sells 1% of market output. Which of these is a valid reason the market is NOT perfectly competitive?


A) The producers do not produce equal shares of the output.
B) There are only a few producers.
C) The barriers to entry are relatively low.
D) The product is differentiated across the producers.

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