Final answer:
Among the given options, check processing facilities are the best example of a 'pure service' firm, as they offer entirely intangible services without the involvement of physical goods. This contrasts with the other options that involve goods or a mix of goods and services.
Step-by-step explanation:
The best example of a “pure service” firm among the options given would be check processing facilities. Pure service firms are characterized by their offering of intangible products that cannot be physically touched or stored, such as expertise, experience, or an activity.
Distribution centers and branch offices often deal with tangible goods alongside services, and hospitals provide a combination of services and goods, such as medical procedures supported by medicines and medical devices. In contrast, check processing facilities are primarily focused on the service of handling financial transactions, which is entirely intangible and performed without transferring physical goods.
Understanding the nature of service firms is essential when studying market structures like perfect competition or monopolies. For example, in perfect competition, firms are price takers, meaning they must accept the market price and cannot set their own. Comparatively, in a monopoly, a single firm dominates, often providing a unique service without close substitutes, allowing them to set higher prices due to the lack of competition.