What does it mean if a market is said to be saturated?

A saturated market is characterized by a situation where the demand for a product or service has been fully met, leading to a slowdown in sales growth. This typically occurs when the majority of potential customers have already purchased the product, resulting in diminishing demand. In a saturated market, businesses face challenges in attracting new customers and may need to focus on retaining existing ones or innovating their offerings to stimulate demand. Pricing competitiveness and market share become crucial as companies vie for customers in an environment where growth is limited.

The other choices do not accurately describe saturation. If demand were increasing rapidly, it would indicate a growing market rather than saturation. A market dominated by one product suggests a monopoly or an oligopoly but does not capture the essence of saturation, which involves a wide range of products being available without significant growth potential. Lastly, while pricing competitiveness can be an issue in saturated markets, it is not a defining characteristic of saturation itself.