Question

Can someone elaborate how avocados can be an example of perfect competition. Any more ideas of real life perfect competition, besides the fruits and vegetable, and the gasoline market. Something that fits into the four assumptions of perfect competition. Looking for a detailed response with many examples. Please.

Answer 1

Avocados can be considered as the ones in perfectly competitive market because of the fact that

1) the product is homogeneous with every seller sell the same product without any difference

2) there are large number of buyers and sellers and this is because of the fact that the avocado producers are more this make them sellers all in all

3) the prices uniform where the price might not vary from one seller to another because of perfect information available

4) there are no barriers to entry because anyone can produce avocado and come and sell in the market as it has no high costs and there are free entry and exit in the market