In pure competition, producers compete exclusively on the basis of

In pure competition, producers compete exclusively on the basis of

A-sell identical items.

B-advertise heavily to promote their good.

C-product the unique features of their good.

D-focus on maintaining a positive image.

Answer – A-sell identical items.

The companies that are a part of pure competition mainly produce and sell the identical items to the customers in an industry or market. Pure competition can be considered as a situation in the market where the sellers are offering products which are considered to ne indistinguishable in nature. This aspect reduces the ability of a single firm to influence the prices of products and services being provided to the customers. The producers who are a part of the saturated markets need to accept various prices that are being offered by the consumers and their willingness of paying can play an important role in improvement of the revenues earned by the organizations. Pure competition can be considered as the term which aims at describing the vast ranges of competitors who are selling the same products. Selling of the identical items is considered to be a major factor that increases the levels of competition within a particular market. Increasing levels of competition thereby influences the prices of the products being offered by the companies. On the other hand, the reason behind rejection of the second option “B-advertise heavily to promote their good.” is based on the lack of importance of promotions of different products within a market that is highly competitive. The reason behind rejection of the third option “C-product the unique features of their good.” is that although the products offered by two different companies can offer unique features to the customers, in the highly competitive environment the features may not be enough to attract the customers and to maintain the loyal customer base. The fourth option “D-focus on maintaining a positive image.” has been rejected as although the companies can have a positive image within the industry, the process of attracting the customers can however not be easy for the companies. The process of maintaining a loyal customer base is also not always possible based on the images that are maintained by the companies.