In the competitive market for figure skate blades, manufacturers offer an array of products that are:

• A. highly differentiated, each with unique features and no close substitutes
• B. largely similar, with little differentiation between brands
• C. produced by a single firm with significant market power
• D. subject to government price controls

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the characteristics of a competitive market. In a perfectly competitive market, products are typically homogeneous or largely similar, meaning there is little differentiation between brands.
2. Step 2: Analyze the product description given. The problem states that figure skate blades are highly differentiated with unique features and no close substitutes, which suggests product differentiation.
3. Step 3: Compare the product characteristics to the options. Since perfect competition requires largely similar products, the description of highly differentiated products does not fit a perfectly competitive market.
4. Step 4: Recognize that a market with highly differentiated products and no close substitutes is more characteristic of monopolistic competition or monopoly, not perfect competition.
5. Step 5: Conclude that the correct description of a competitive market for figure skate blades would be that the products are largely similar with little differentiation between brands.