In the market for gold jewelry (unlike the market for gold ore), products come in a range of designs, styles, and levels of quality. Which of the characteristics of a competitive market is violated in the jewelry market?

Question

Business

Kellen Ray

28 February, 23:03

In the market for gold jewelry (unlike the market for gold ore), products come in a range of designs, styles, and levels of quality. Which of the characteristics of a competitive market is violated in the jewelry market?

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Answers (1)

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Frances Clark · Answer 1

Answer: The characteristic violated is "homogeneity of products" that is, goods are identical in quality, size or design.

Explanation:

Perfect competition is the type of market structure that is characterized by a large number of buyers and sellers in the market. In a perfect competition, the firms sell homogenous products. Homogeneous products are products that are identical in size, quality and design. The price of goods are determined by the market forces of demand and supply and an individual firms is not able to alter the price. There is also free entry and exit for firms and customers have a perfect knowledge about the market.

The characteristics of a perfect competition violated here is the homogeneity of goods and services. Here, products come in different quality and design which means the product are heterogeneous which isn't a feature of competitive market.