1. Characteristics of price-taker markets Firms in the market will be price-takers when the following conditions are met: 1. All firms in the market produce an identical product. 2. A large number of firms (buyers and sellers) exist in the market so that no single firm dominates the market. 3. Each firm supplies only a very small portion of total output supplied to the market. 4. No barriers limit entry into or exit from the market, and firms and resources are fully mobile. Use the dropdown menus in the following table to identify whether each of the following scenarios describes a competitive price-taker market, along with the correct explanation of why or why not. Price-Taker Market? Scenario The government has granted the U.S. Postal Service the exclusive right to deliver mail. A few major airlines account for the vast majority of air travel . Consumers view all airlines as providing basically the same service and will shop around for the lowest price. There are hundreds of colleges that serve millions of students each year. The colleges vary by location, size, and educational quality, which allows students with diverse preferences to find schools that match their needs. There are hundreds of high school students in need of algebra tutoring services in San Francisco. Dozens of companies offer tutoring services, and the parents who seek out tutors view the quality of the tutoring at the different companies to be largely the same.
1. Characteristics of price-taker markets Firms in the market will be price-takers when the following conditions are met: 1. All firms in the market produce an identical product. 2. A large number of firms (buyers and sellers) exist in the market so that no single firm dominates the market. 3. Each firm supplies only a very small portion of total output supplied to the market. 4. No barriers limit entry into or exit from the market, and firms and resources are fully mobile. Use the dropdown menus in the following table to identify whether each of the following scenarios describes a competitive price-taker market, along with the correct explanation of why or why not. Price-Taker Market? Scenario The government has granted the U.S. Postal Service the exclusive right to deliver mail. A few major airlines account for the vast majority of air travel . Consumers view all airlines as providing basically the same service and will shop around for the lowest price. There are hundreds of colleges that serve millions of students each year. The colleges vary by location, size, and educational quality, which allows students with diverse preferences to find schools that match their needs. There are hundreds of high school students in need of algebra tutoring services in San Francisco. Dozens of companies offer tutoring services, and the parents who seek out tutors view the quality of the tutoring at the different companies to be largely the same.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:1. Characteristics of price-taker markets
Firms in the market will be price-takers when the following conditions are met:
1. All firms in the market produce an identical product.
2. A large number of firms (buyers and sellers) exist in the market so that no single firm dominates the market.
3. Each firm supplies only a very small portion of total output supplied to the market.
4. No barriers limit entry into or exit from the market, and firms and resources are fully mobile.
Use the dropdown menus in the following table to identify whether each of the following scenarios describes a competitive price-taker market, along
with the correct explanation of why or why not.
Price-Taker Market?
Scenario
The government has granted the U.S. Postal Service the exclusive right to deliver mail.
A few major airlines account for the vast majority of air
travel
. Consumers view all airlines as providing basically the same service and will shop
around for the lowest price.
There are hundreds of colleges that serve millions of students each year. The colleges
vary by location, size, and educational quality, which allows students with diverse
preferences to find schools that match their needs.
There are hundreds of high school students in need of algebra tutoring services in San
Francisco. Dozens of companies offer tutoring services, and the parents who seek out
tutors view the quality of the tutoring at the different companies to be largely the
same.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education