Question

What is meant by a product being perfectly homogeneous? What is ts implication for the price charged by producers in the market?

Answer 1

A product being perfectly homogeneous implies that the products are identical in size, quality and quantity. Perfectly homogeneous product is sold in the market at a uniform price.

If even an individual firm tries to charge a higher price, it would lose all its buyers to a large number of other sellers. Hence, they sell homogeneous product at the prevailing market price as decided by the market forces of demand and supply.