Question

John Smith is a farmer and sells sugarcane to a sugar manufacturing company. David is a retailer for pet food. Which of the following is a difference between David’s and John’s businesses?

Group of answer choices

Unlike David, John has very few competitors.

Unlike David, John is eligible for tax exemptions.

Unlike David, John has no control over the pricing of his product.

Unlike David, John can patent his product.

Answer 1

The correct option is C.) Unlike David, John has no control over the pricing of his product.

John is into the farming which comes under the perfect competiton. Hence, John has no control over the prices.

On the other hand, David is a retailer and he can differentiate products leading to some control over the prices.