Final answer:
A successful product-market typically includes customer need fulfillment, and may involve high competition and low demand variability. Limited market reach, however, is generally not indicative of success. Perfect competition and differentiated products can also be features of vibrant markets.
Step-by-step explanation:
For a product-market to be considered successful, several characteristics need to be present. One sign of a successful product-market is customer need fulfillment, where products or services meet the demands and needs of the customers. Another factor is low demand variability, which indicates that consumer demand for a product is stable and predictable, making it easier for businesses to plan for production and inventory management.
High competition could be a sign of a successful market as it may indicate a thriving market with plenty of consumer interest and demand, as well as the presence of perfect competition which means there are many sellers and buyers, and products are identical. Additionally, markets with high competition typically have low barriers to entry and exit, which can be considered positive characteristics. Conversely, limited market reach is generally not a quality of a successful product-market as it can restrict a company's potential for growth and sales.
In a perfectly competitive market, the demand curve faced by a firm is perfectly elastic, and there are many sellers offering identical products with sellers and buyers well informed about the products. The concept of differentiated products is related to monopolistic competition rather than perfect competition. In a monopolistically competitive market, a variety of styles, flavors, locations, and characteristics contribute to product differentiation, which can also signal a successful market to some extent, despite not meeting the criteria for perfect competition.