Which of the following best describes a market with all firms selling an identical product?

Perfect competition is characterized by a market structure where numerous firms sell an identical or homogeneous product, ensuring that no single firm can influence the market price. In such a market, buyers and sellers have perfect information, leading to a situation where firms are price takers. The presence of many firms competing with identical offerings means that consumers can easily switch from one supplier to another, driving competition to its peak and encouraging efficiency.

In a perfectly competitive market, the characteristics include freedom of entry and exit, a large number of buyers and sellers, and products that are perfectly substitute for one another. This results in firms striving for efficiency and innovation while any supernormal profits are eradicated in the long run as new entrants join the market, thus confirming the market's competitive nature.