Answer to Question #157102 in Economics for stephanie maree

Question

1. The movies “Food Inc.” and “King Corn” examine the influence of businesses, consumers, and governments on the markets for food in the US. The movies show examples of each of 4 basic market structures as they are defined by economists: Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly (for Monopoly, watch the chapter “From Seed To Supermarket” at 1:06:00 in “Food Inc.” As a final review of these market structures, first identify the 4 businesses mentioned in the movie that fit each of the 4 market models, and then imagine how one change in regulations will affect the costs, revenues and profits of the businesses. 
2. Provide an example of perfect competition from either “King Corn” or “Food, Inc.” then Explain how this example fits the definition of perfect competition. 

Answer 1

Perfect competition is considered an idealized model of a market economy. This is a market structure where buyers and sellers adapt to the existing market conditions and cannot influence the price, but form it by their total contribution to market demand and supply.

With this model, the competition between sellers reaches its peak. Since market participants have practically no influence on the terms of sale, the economy becomes resistant to inflation, unemployment, and other negative processes.

Perfect competition is considered an idealized model of a market economy. This is a market structure where buyers and sellers adapt to the existing market conditions and cannot influence the price, but form it by their total contribution to market demand and supply.

With this model, the competition between sellers reaches its peak. Since market participants have practically no influence on the terms of sale, the economy becomes resistant to inflation, unemployment, and other negative processes.

Perfect competition is considered an idealized model of a market economy. This is a market structure where buyers and sellers adapt to the existing market conditions and cannot influence the price, but form it by their total contribution to market demand and supply.

With this model, the competition between sellers reaches its peak. Since market participants have practically no influence on the terms of sale, the economy becomes resistant to inflation, unemployment, and other negative processes.