Choose a market for a good in your area that seems to be a perfectly competitive
ID: 1249435 • Letter: C
Question
Choose a market for a good in your area that seems to be a perfectly competitive market. Write four or five substantive paragraphs that describes the market and answers the following questions: (Wall-mart)Identify the buyers and sellers as well as the goods or services.
How closely do real world conditions match the characteristics listed in the model?
Are the sellers price takers?
Do they compete using price?
Is the good in question standardized?
Is this market regulated by government in any way
Explain the competitive environment.
Explanation / Answer
I'm not going to do this assignment for you, but I will help. Pick rice. All rice is the same. Rice is sold by an abundance of stores. Lots of people buy rice. In the long run, profit is zero. Anyone who wants to sell rice is able to at the market price. Anyone who wants to buy rice at the market price can do so. Other than sales taxes and farming subsidies, the market is pretty competitive. Real world conditions match really well. Sellers are price takers. Standardized good (all rice is the same). The market is fairly unregulated. You could do the same thing with gasoline but note that gasoline is heavily taxed and regulated.