Question

The agricultural supply chain is made up of farmers, food assemblers and brokers, food manufacturers and processors, food distributors and wholesalers, and food retailers.

A. Which sector in the supply chain can best be categorized as perfectly competitive? Why?

B. Which sector in the supply chain can best be categorized as oligopolistic? Why?

C. Which sector in the supply chain can best be categorized as monopolistically competitive? Why?

Answer 1

1. Farmers can be categorized as a perfectly competitive market because agriculture markets as an example of PC .The same crops that different farmers grow are largely interchangeable.There is also that farmers meet the demnad created by supply chain.
2. Food manufacturers and processors can be categorized as oligopolistic market because as the food products can be processed by many and in differnet ways to be consumed by the customer finally,so there will be many sellers. Many models of oligopoly that differ from one another mostly in the nature of the competitive companies' behaviour can be found through the study of oligopolistic structures. Some models describe only the behaviour of two companies in the monitored market (duopoly), others describe several companies of the same power (cartel), still others assume that one of the companies has a dominant position in the market, etc. The text of this article deals with oligopolistic competition in the food market in the terms of the behaviour of grocers and with the impact of this competition upon the market competition in the sector. First, it mentions the agreements on common cooperation and procedure, when cartel market structure originates. It also analyzes the examples of behaviour of oligopoly with a dominant firm on the market with products in the food sector, with the goal of detecting whether the market with these products is significantly influenced by the oligopolistic behaviour of companies.
3. Retailers can be categorized as monopolitic competitive market as retailers are the most obvious stage of the food chain when consumers purchase food.given the growing presence of food retail chains, there has also been concern about the growing role and increasing concentration of retailers on the food supply chain as a whole; the range of concerns stretch beyond seller power to the implications for suppliers at the manufacturing and farming sectors.