Question

Respond to the following in a minimum of 100 words:

Discuss one of the market models and provide an example of a real-world market that matches the market model you chose. What does economic theory teach you about the industry you chose?

Answer 1

Market Model-Perfect Competition
Perfect competition is one among the few market models including monopoly, oligopoly and monopolistic competition. Perfect competition constitutes to a major share of markets. There are many examples including automobile industry, electronics industry etc. In most of the countries, these markets belong to perfect competition. In India, the competition is high in electronic goods. The example can be taken to analyze the performance and the advantages of the market model. The introduction of different firms to the market has increased the efficiency, quality and optimum pricing in the market. As the economic theory suggests, the perfect competition helps to increase efficiency, competitive pricing and better customer service in the market. Thus the market model for these kind of goods give better advantages and consumer satisfaction regarding utility and satisfaction given a large market and wide range of perfect substitutes.