ipl-logo

Explain What Price-Takers Are There When There Is A Perfectly Competitive Market

695 Words3 Pages

Price takers are individuals or firms who take price they way it is in the market. In perfect competitive market, the average price level of goods and services form the market price. This market price controls and determines both demand and supply. The firms, producers and consumers have no option that to take the price the way market situation kept them to be. In such business where price are adopted the way they appear in market is called price taking. Price taking producers are producers who believe that their product price make no different in market price. Therefore, their individual price has no effect on the market price. Then, the only option is to produce and sell with the market price. Those producers are referred to as price-takers producers. Let us examine these …show more content…

Explain your answers based on the conditions of competition that we learned in this chapter
a) Aspirin
b) Jay-Z concerts
c) Jeeps
Industries that are perfectly competitive are the firms that have free exit and free entry. The prices are determined by the market demand and supply. This situation is critically analyzed in the following cases.
a) Aspirin: Aspirin industry is a perfect competitive industry because many manufacturers produce aspirin. The product has free exit and free entry because it well standardizes in such a way that new manufacturers can easily enter and old ones can easily exit.
b) Jay-Z concerts: Jay-Z concerts are not perfectly competitive industry because there no free entry and free exit into the industry. There is only one industry that produces Jay-Z concerts and the product has no variety of industries that produce variety of it.
c) Jeeps: Jeeps are not produced under a perfectly competitive industry: Jeeps are not produced in a perfectly competitive industry. The manufacturers of Jeeps are few each holding a large market share. Therefore, the products are not standardized in the minds of the

Show More
Related

Porter Airlines Code Of Ethics

663 Words | 3 Pages

5. Fair Competition and

Read More

Cooperation Over Competition In Edward Bellamy's Looking Backward

763 Words | 4 Pages

Competition keeps companies striving for the highest quality products for the lowest price because they want to attract customers. However, if people had no choice where to buy their car, it would not matter what a company sold. Additionally, if there was no competition, there would be no way to benchmark your products for quality or technological advancements. Still using the car company example, the car industry would be like it is in Cuba where everyone drives cars from the 70’s, because that is all they

Read More

Naked Economics Chapter 8

725 Words | 3 Pages

In monopolistic competition, an industry contains a number of firms producing differentiated products. These firms act as individual monopolist, but additional firms enter a profitable industry until monopoly profits are competed away. Equilibrium is affected by the size of the market: A large market will support a larger number of firms, each producing at a larger scale and thus a lower average cost, than a small market. 4. International trade allows for the creation of an integrated market that is larger than any one country's market.

Read More

Capital One Essay

598 Words | 3 Pages

Because of that elimination, I have found that my company falls under monopolistic competition category. 4. Explain why you feel it is this particular degree of competition. I feel it falls under this degree of competition because there are many banks in America. It is not just one bank or a few banks that have control.

Read More

Personal Narrative: My Experience With Crown Chrysler

611 Words | 3 Pages

I replied the jeep Cherokee Laredo. I now own a 2012 Cherokee. He started looking at his inventory and proceeded to take me out to the parking lot to show me what they had. After looking over his inventory, they did not have any; Laredo’s

Read More

Summary Of The Faculty Lecture By Mark Manfredo

258 Words | 2 Pages

The faculty lecture that I watched at 7 p.m. on October 4th was presented by Mark Manfredo. The lecture presented by Manfredo was based around commodity futures markets and it’s many factors. Manfredo discussed many different commodities and how they fall under the pure competition markets. He states that firms, buyers, and sellers are the price takers in pure competition markets as well. Manfredo shows how the prices of these commodities are volatile and how commodity future markets allow businesses to lock in commodity prices.

Read More

Summary: Dallas Street Fashion

638 Words | 3 Pages

Competitors and

Read More

Economics Test Questions

1110 Words | 5 Pages

A pure monopoly doesn't need advertising scene there is only one source of the product and it doesn't compete with anyone. Perfect competition has no advertising scene there are no brand names and if one seller lowers the price the rest of the sellers lower their price. Oligopoly there are a few large companies with dependent behavior, there is advertizing sense the companies want to be chosen over the others. Question 6: Opponents of business taxes argue that business owners simply pass the tax onto consumers. Explain whether or not this makes sense.

Read More

Competitive Case Analysis Of Wilkerson's Company

1770 Words | 8 Pages

Now, like any other company out there in the corporate world, they all come across a point in business where they face a competitive situation, due to either their product line, pricing, or their financial system. According to our

Read More

Value Proposition Of Fitbit

1808 Words | 8 Pages

The pricing strategy or pricing policy is one of the most important managers make for a product as it affects the profitable outcome and competitiveness that a product may make. (Toni, 2017). A business can use a variety of pricing strategies when selling a product or service. The price can be set to maximize profitability for each unit sold or from the market overall. It can also be used to defend an existing market from new entrants, to increase market share within a market or to enter a new market by dropping the price or offering more benefits with the device such as packages.

Read More

Globalization Impact On Nike

1083 Words | 5 Pages

Competition leads to innovation. If you’re the only player in the field, it can be difficult to improve. And if you’re working in a crowded market, you won’t succeed by doing what everyone else does. Healthy competition encourages change which will distinguish your company from others through technology, products altercations or by improving the customer experience. In the business world today the customer is the most important person to please.

Read More

Industry Competition: Michael Porter's Five Forces Model

2124 Words | 9 Pages

It notes that stiff competition can reduce the potential profit of like companies. Firms must determine the strategy that will be utilized to gain and maintain the upper hand in the industry, as it relates to price, marketing, competition and the introduction of new and innovative products into the market. The more a company senses competition the intensity of its strategy may increase as it does not only respond to other firms, but also to the industry as a whole. It is natural for firms to respond to competitive moves made by its rival as it will have an effect albeit positive or negative on the industry. Firms may be forced to supply the demands for cheaper but more reliable products or to create differentiated products to maintain the competitive

Read More

Coca Cola Perfect Competition Industry

850 Words | 4 Pages

When there is a large number of sellers and a large number of buyers in a market, that market is regarded as a perfectly competitive market or industry. In a perfectly competitive market, a single firm cannot dictate the pace and the selling price (Khan Academy, n.d.). In other words, one firm cannot set the prices and the competitors are obligated to market prices. What is fascinating about a perfectly competitive industry is that the barriers that prevent new firms from entering the industry are flexible; that means there are minor barriers of entry as well as little or no barriers to exit the industry (Rittenberg & Tregarthen, 2009). Additionally, buyers and sellers have all the necessary information to make a decision to buy or sell a product.

Read More

Marketing: Marketing Mix In The Ice Cream Industry

1497 Words | 6 Pages

6.1.2 Price Price is the value or amount that customer pays to buy a product. For instance, for our Star Lab ice cream shop, we need to consider the cost of production of our ice cream, price of our main competitor and our potential customers demographics in order to succeed this competitive market. (C. Breidert, 2007, p.9) 6.1.2.1 Pricing Strategy Pricing strategy that can be used by our company such as penetration pricing, cost-plus pricing, value based pricing and more. But we think that market penetration pricing is the best pricing strategy to be used by our business.

Read More

Oligopoly Case Study

1870 Words | 8 Pages

1.0 INTRODUCTION In an economy, there exists different market structures to accommodate different industries and firms. This study will be made to understand in further depth the market power of different market structures, and in particular an example of using case studies of agricultural sector of the French markets to explain how an ideal perfectly competitive market works. This will then be further strengthened with several references linked to the case study. 1.1 Monopoly market

Read More

More about Explain What Price-Takers Are There When There Is A Perfectly Competitive Market

Related Topics

Open Document