Chapter 9, Problem 12AA

To determine

To state: An example of an almost perfect competition market.

Answer to Problem 12AA

Agricultural market can be one example of an almost perfect competition market.

Explanation of Solution

Although perfect competition market is rare to find in the business because it is nearly impossible to match the characteristics of such market in the actual world. There still exist a few, one of them is agricultural market where there are huge number of buyers and sellers selling homogeneous products all the time. There can be no substitutes for vegetables, fruits, pulses etc. It is also very easy to enter this business, anybody can start doing farming. Many a times, people do it at their home gardens too if they don’t own any land and one can easily exit it whenever they want. So, this market has the characteristics that fits, somehow, with the features of a perfectly competitive market.

Economics Concept Introduction

Introduction: Perfect competition refers to the market structure where there exists a large number of buyers and sellers in trade of homogeneous products.