The combination of product homogeneity and perfect knowledge ensure that a single price will prevail on a perfectly competitive market.

Question

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In a perfectly competitive market, product homogeneity (all firms produce identical products) and perfect knowledge (all buyers and sellers have full information about prices and products) ensure that no single seller can charge more than the going price, leading to a single price prevailing in the market.

The Combination of Product Homogeneity and Perfect Knowledge Ensure That