Final Answer:
Perfect pure competition is not characterized by product differentiation is false. so the correct answer is false.
Step-by-step explanation:
Perfect Pure Competition: This economic model features a large number of small firms producing identical products without product differentiation. Therefore, the statement is false.
Characteristics of Perfect Pure Competition:
Homogeneous Products: In perfect pure competition, products are identical, with no differentiation. All firms produce the same goods, and consumers cannot distinguish between them.
Many Small Firms: Numerous small firms operate in the market, none of which has the power to influence the market price through individual actions.
Price Taker: Each firm is a price taker, meaning it accepts the market price as given and adjusts its output accordingly.
Product Differentiation in Other Market Structures: Product differentiation is more common in imperfectly competitive markets like monopolistic competition, oligopoly, and monopoly. In these markets, firms often engage in product differentiation to establish a unique selling proposition.
The absence of product differentiation is a fundamental characteristic of perfect pure competition, distinguishing it from other market structures. so the correct answer is false.