Everlene's Bakery competes against many other bakeries in the same city. However, each bakery uses different recipes and each claims to offer better products than their rivals. For example, Everlene's advertises that it produces the "World's Best" chocolate-chip cookies. This suggests that Everlene's market is an example of pure competition.

Question

Quizplus · Accepted Answer

Pure competition is a market structure where many firms produce similar products and it is easy for new firms to enter the market. In such a market, firms have little control over price and rely on non-price competition to differentiate themselves. However, if Everlene's bakery claims to produce the "World's Best" chocolate-chip cookies, it suggests that they are using product differentiation to separate themselves from their competitors, which is not characteristic of pure competition.

Everlene's Bakery Competes Against Many Other Bakeries in the Same