Firms in the market will be price-takers when the following conditions are met: 1. All firms in the market produce an identical product. 2. A large number of firms (buyers and sellers) exist in the market so that no single firm dominates the market. 3. Each firm supplies only a very small portion of total output supplied to the market. 4. No barriers limit entry into or exit from the market, and firms and resources are fully mobile. Use the dropdown menus in the following table to identify whether each of the following scenarios describes a competitive price-taker market, a with the correct explanation of why or why not. Price-Taker Market? Scenario The government has granted the U.S. Postal Service the exclusive right to deliver mail. A few major airlines account for the vast majority of air travel . Consumers view all airlines as providing basically the same service and will shop around for the lowest price. There are hundreds of colleges that serve millions of students each year. The colleges vary by location, size, and educational quality, which allows students with diverse Ves, meets all assumptions preferences to find schools that match their needs. There are hundreds of high school students in need of algebra tutoring services in San No, no free entry Francisco. Dozens of companies offer tutoring services, and the parents who seek out No, not many sellers tutors view the quality of the tutoring at the different companies to be largely the same. No, not an identical product
Firms in the market will be price-takers when the following conditions are met: 1. All firms in the market produce an identical product. 2. A large number of firms (buyers and sellers) exist in the market so that no single firm dominates the market. 3. Each firm supplies only a very small portion of total output supplied to the market. 4. No barriers limit entry into or exit from the market, and firms and resources are fully mobile. Use the dropdown menus in the following table to identify whether each of the following scenarios describes a competitive price-taker market, a with the correct explanation of why or why not. Price-Taker Market? Scenario The government has granted the U.S. Postal Service the exclusive right to deliver mail. A few major airlines account for the vast majority of air travel . Consumers view all airlines as providing basically the same service and will shop around for the lowest price. There are hundreds of colleges that serve millions of students each year. The colleges vary by location, size, and educational quality, which allows students with diverse Ves, meets all assumptions preferences to find schools that match their needs. There are hundreds of high school students in need of algebra tutoring services in San No, no free entry Francisco. Dozens of companies offer tutoring services, and the parents who seek out No, not many sellers tutors view the quality of the tutoring at the different companies to be largely the same. No, not an identical product
Chapter11: Profit Maximization
Section: Chapter Questions
Problem 11.15P
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Transcribed Image Text:Firms in the market will be price-takers when the following conditions are met:
1. All firms in the market produce an identical product.
2. A large number of firms (buyers and sellers) exist in the market so that no single firm dominates the market.
3. Each firm supplies only a very small portion of total output supplied to the market.
4. No barriers limit entry into or exit from the market, and firms and resources are fully mobile.
Use the dropdown menus in the following table to identify whether each of the following scenarios describes a competitive price-taker market, a
with the correct explanation of why or why not.
Price-Taker Market?
Scenario
The government has granted the U.S. Postal Service the exclusive right to deliver mail.
A few major airlines account for the vast majority of air
travel
. Consumers view all airlines as providing basically the same service and will shop
around for the lowest price.
There are hundreds of colleges that serve millions of students each year. The colleges
vary by location, size, and educational quality, which allows students with diverse
Ves, meets all assumptions
preferences to find schools that match their needs.
There are hundreds of high school students in need of algebra tutoring services in San
No, no free entry
Francisco. Dozens of companies offer tutoring services, and the parents who seek out
No, not many sellers
tutors view the quality of the tutoring at the different companies to be largely the
same.
No, not an identical product
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