When Products in an Industry Are Relatively Homogeneous and Price

question 131

Multiple Choice

When products in an industry are relatively homogeneous and price is a key purchase consideration,

• A) competition-based pricing becomes more important.
• B) demand-based pricing dominates pricing decisions.
• C) firms tend to use secondary-market pricing.
• D) cost-based methods like markup pricing are dominant.
• E) customary pricing is often used.

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Definitions:

Market Structure

The competitive environment characterizing a market, determined by the number of firms, product differentiation, and ease of entry and exit.

Agricultural Products

Goods derived from agriculture including crops, livestock, and products directly obtained from farming activities.

Wheat

Wheat is a cereal grain grown worldwide and is a staple food ingredient used for making bread, pasta, cake, and many other food products.

Pure Competition

A market format where there are many sellers presenting the same products, and none of these sellers are able to affect the market price on their own.