Which of the following is a feature of a purely competitive market?

• A. Firms have control over market price
• B. Firms are price takers
• C. Products are highly differentiated
• D. There are significant barriers to entry

Answer: (B)

Verified step by step guidance

1. Understand the characteristics of a purely competitive market, which is a market structure with many buyers and sellers where no single firm can influence the market price.
2. Recall that in a purely competitive market, firms are 'price takers,' meaning they accept the market price as given and cannot set their own prices.
3. Recognize that products in a purely competitive market are homogeneous or identical, not highly differentiated.
4. Note that there are no significant barriers to entry or exit in a purely competitive market, allowing firms to freely enter or leave the market.
5. Conclude that the correct feature of a purely competitive market from the options given is that firms are price takers.