Answer to Question #176509 in Microeconomics for Bubblys

Question

“Florida orange growers” advertise as a group, but individual orange growers do not. What does this fact suggest about the market for oranges? Why?

Answer 1

Solution:

The market for oranges is a perfectly competitive market.

This is because a perfectly competitive market is a type of market where competition is at its highest possible level. It also exhibits the following characteristics: a large number of buyers and sellers, homogenous product is produced by everyone in the market, there are free entry and exit of firms, there is zero advertising cost, consumers have perfect knowledge of the market, no transportation costs, each firm earns normal profits and no firm can influence the price of the product.