The market for which item generally involves pure competition?

The market for which item generally involves pure competition?

a) cola

b) corn

c) jeans

d) ice cream

Answer: b) corn

The corn market mainly consists of a purely competitive market and it is a market structure that is comprised of a large number of buyers who purchase a product that is identical to what other buyers are purchasing; it also has a large number of sellers, the products being offered in the market are identical and there is complete information in the market. In the corn market, there are many sellers, producing a rather homogenized product and many buyers (for instance food processing companies and makers of animal feed) who can obtain information about the prices for the goods and the quality. In addition, the individual producers are known to be price takers hence they do not have much control over the price determination in the market. In contrast to cola, jeans, ice cream, and other goods, the availability of which allows the companies to set a differentiation strategy and at least partial control over the prices, the corn market represents all the major features of pure competition, thus serving as an example of the purely competitive market best.