1. Does a perfectly competitive market exist in real life? Look at the following markets and describe how close they are to perfect competition. i. Market for bottled water. ii. Market for foreign currency (say US$). iii. Market for pork buns.

1. Does a perfectly competitive market exist in real life? Look at the following markets and describe how close they are to perfect competition. i. Market for bottled water. ii. Market for foreign currency (say US$). iii. Market for pork buns.

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter23: Price-searcher Markets With Low Entry Barriers

Section: Chapter Questions

Problem 13CQ

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Concept explainers

Productive and Allocative Efficiency Analysis

Productive efficiency, also referred to as production efficiency is a term in economics describing the level at which a company is operating at its maximum capacity. Beyond this point, the entity will be unable to manufacture any additional goods without cutting down another product’s production level. This occurrence is an outcome of production happening alongside a Production Possibility Frontier (PPF).

Question

1. Does a perfectly competitive market exist in real life? Look at the following markets
and describe how close they are to perfect competition.
i. Market for bottled water.
ii. Market for foreign currency (say US$).
iii. Market for pork buns.

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