Bringing Perfect Competition to Life
Agriculture serves as a perennial example of a perfectly competitive market. This type of market trades in a homogenous product, which means one producer’s output cannot be easily distinguished from another’s. Additionally, a perfectly competitive market has low barriers to entry/exit; beginning or ending production must be cheap and quick. Also, a large set of buyers and sellers participate in these markets, so individual players cannot move the market. Ideal agriculture meets all these criteria: one sack of potatoes is essentially the same as any other, planting decisions are often flexible, and crop markets are mostly well populated. Last semester Continue reading Bringing Perfect Competition to Life