Please draw on your experiences and what you have observed to address the follow
ID: 1156737 • Letter: P
Question
Please draw on your experiences and what you have observed to address the following questions and topics. Choose a market for a good in your area that seems to be a perfectly competitive market. Perfect competition is useful in analyzing real-world markets, even though there are very few, if any, that match the characteristics of the perfect competition model. Answer the following questions to describe the market, and describe how competitive the market you have chosen is: What good or service is provided in this market? Who are the buyers and who are the sellers in the market? Are there many sellers in the market? Are there very many substitutes for the good or service? If the store where you usually buy this item raised its prices, would you go to another store or switch products? Explain. Do you think that this a competitive market? Explain.
Explanation / Answer
Answer:
Perfectly competitive market is characterized by too many firms selling identical goods and sellers are price takers
What good or service is provided in this market?
Consumer goods market where two firms sells grocery and daily needs for a home
Who are the buyers and who are the sellers in the market?
Buyers are consumers and sellers are grocery dealers
Are there many sellers in the market?
Yes, there are many sellers in the market
Are there very many substitutes for the good or service?
Yes. Too many firms selling identical good
If the store where you usually buy this item raised its prices, would you go to another store or switch products? Explain.
Yes, people are aware of the goods they purchase and if the regular firm raises prices people would compare with other existing firms and would switch over.
Do you think that this a competitive market? Explain
Yes this is a competitive market as sellers are price takers to some extent, and too many firms exists in the market, entry and exit is easy for the firms, consumers have good knowledge of what they buy these features meets the criteria of competitive market.