Assignment Nos.

8
Perfect Competition

Please answer the following questions and submit on the deadline date.

1. What do you think is/are the importance of understanding the perfect

competition in the market. How does economists/managers benefits in
understanding this market typology.

 Understanding perfect competition in the market is important for

economists and managers as it provides a theoretical framework for
analyzing market dynamics and making informed decisions. Economists
benefit from understanding perfect competition as it serves as a
benchmark for comparing real-world market structures and evaluating the
efficiency of market outcomes (Rajagopal, 2012).

2. Are the following market : industrial market, agricultural markets, car

manufacturing market an example of a perfect competition . Use the
characteristics of a perfect competition and support your claim with facts and
data.

 Industrial markets, agricultural markets, and the car manufacturing market

are not examples of perfect competition. Perfect competition is
characterized by many producers of homogeneous goods, where no
single firm has control over the market. In the case of industrial markets,
there may be various market structures such as monopolistic competition
or oligopoly, where firms have some degree of market power (Soldatos,
2021). Agricultural markets, on the other hand, can approximate
competitive markets due to the presence of many producers of
homogeneous or nearly homogeneous goods. The car manufacturing
market, specifically the rivalry between General Motors and Ford, can be
seen as an example of firm rivalry and competition, but it does not meet
the criteria of perfect competition as there are only a few dominant
players in the market (Tremblay, 2012). Therefore, these markets do not
exhibit the characteristics of perfect competition.
References:

Rajagopal (2012). Understanding Market Competition. In: Darwinian Fitness in the

Global Marketplace. Palgrave Macmillan, London.
https://doi.org/10.1057/9781137268334_2

Soldatos, G.T. A model of market competition as a prize contest or a model of strife for
market domination. SN Bus Econ 1, 28 (2021). https://doi.org/10.1007/s43546-020-
00035-4

Tremblay, V.J., Tremblay, C.H. (2012). Perfect Competition and Market Imperfections.
In: New Perspectives on Industrial Organization. Springer Texts in Business and
Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-3241-8_5