Question

In each of the following cases, state whether you believe the industry fits as perfect competition, pure monopoly, monopolistic competition, or oligopoly. In the space below, state your reason:            

a. Orange Growers in San Diego County

b. Colleges in San Diego County            

c. Bookstores for Students of Palomar College

Answer 1

Answer

a. Orange Growers in San Diego County - Perfect Competition

Reason: There are many orange growers in San Diego County , and also there are many buyers. Free entry and exit from the market. The product, i.e., orange is identical for all firms.Price is determined by demand and supply forces, and is given in the market. All the firms are price taker. No individual firm can influence the price.

b. Colleges in San Diego County - Monopolistic Competition.

Reason - All the colleges in San Diego County produce the same product, i.e., education, but the structure of education or the way each college educate the students, is different. Each college has its own education fees also, which it can raise as per its wish.

c. Bookstores for Students of Palomar College - Oligopoly Market.

Reason - Very few bookstores, i.e., sellers and many buyers , i.e., students in Palomar College. The bookstores outside the Palomar College can not enter the college to sell their books. Each bookstore sells similar and also different books.

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