Topic 8: MARKET STRUCTURE AND PERFECT COMPETITION
Self-check Questions
Task A: Firms in a perfectly competitive market are said to be “price
takers”—that is, once the market determines an equilibrium price for the
product, firms must accept this price. If you sell a product in a perfectly
competitive market, but you are not happy with its price, would you raise
the price, even by a cent?
No, because there are a big number of other substitutes on the market that will
surely crumble my total profits
Task B: Would independent trucking fit the characteristics of a perfectly
competitive industry
No, because in a perfectly competitive market, the market price is determined
solely by supply and demand in the entire market and not the individual.
Task C: Look at Table 13. What would happen to the firm’s profits if the
market price increases to $6 per pack of raspberries?
Self-check Questions
Task A: Firms in a perfectly competitive market are said to be “price
takers”—that is, once the market determines an equilibrium price for the
product, firms must accept this price. If you sell a product in a perfectly
competitive market, but you are not happy with its price, would you raise
the price, even by a cent?
No, because there are a big number of other substitutes on the market that will
surely crumble my total profits
Task B: Would independent trucking fit the characteristics of a perfectly
competitive industry
No, because in a perfectly competitive market, the market price is determined
solely by supply and demand in the entire market and not the individual.
Task C: Look at Table 13. What would happen to the firm’s profits if the
market price increases to $6 per pack of raspberries?
