For each of the following, is the industry perfectly competitive? Referring to market share, standardization of...

For each of the following, is the industry perfectly competitive? Referring to market share, standardization of the product, and/or free entry and exit, explain your answers in detail.

1. Aspirin

2. Alicia Keys Concerts

3. SUVs

Solutions

Expert Solution

a) Aspirin

It is a perfectly competitive market. Aspirin is widely used around the world for inflammation and other needs. It is sold by many firms around the world and any new firm can enter and exit the market as per his choice. The product will be the same or be having the same salt composition.

b) Alicia Key concert: Not a perfect market. Alicia key is just one individual singer. IF other tries to imitate her it will be a parody or an imposter. The new copied product will be not even close to the original singer. There is no entry and exit in this market but a monopoly. There can be concerts by other singers but it will not be an Alicia key concert.

c) SUVs: Not a perfectly competitive market. there are many different variants of an SUV and the product is not standardized. THere are several barriers to entry for making the product like the technical know how. For example, a BMW Suv will be a BMW Suv and can't be copied by Audi. If Audi makes one it will be his own version.

Rahul Sunny answered 1 year ago

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