(a)
The type of market for Wheat belongs is to be determined.
Answer to Problem 1SPPA
Explanation of Solution
The wheat belongs to perfectly competitive market because it is a homogenous commodity and each producers of wheat share small portion of market share.
Perfect Competition:
Perfect competition is a market condition where a very large number of buyer and sellers exists, and the seller sells the homogenous commodities with perfect knowledge.
(b)
The type of market for jeans belongs is to be determined.
Answer to Problem 1SPPA
Explanation of Solution
Jeans belongs to monopolistically competitive market. There are a large number of sellers exists in this market and each firm has some control over the price of jeans. So, jeans belong to monopolistically competitive market.
Monopolistically competitive market:
Monopolistic market refers to the market structure in which there are many firms which sell closely related but differentiated commodities.
(c)
The type of market for printer cartridges belongs is to be determined.
Answer to Problem 1SPPA
Oligopoly market.
Explanation of Solution
Printer cartridge belongs oligopoly market. Since it contains the characteristic − few firms participate for most or all of total production and these firms enjoys all market share and profits.
Oligopoly Market:
The oligopoly market refers to the situation where only a few firms participate for most or all of total production. In this market, these few firms earn a substantial profit in the long run because the barrier to entry makes it very difficult to enter new firms in the market.
(d)
The type of market for toothpaste belongs is to be determined.
Answer to Problem 1SPPA
Oligopoly market.
Explanation of Solution
The toothpaste contains the characteristics of oligopoly market. There are few sellers and manufacturer for toothpaste and these firms enjoys whole profit and market share. So, it belongs to oligopoly market.
Oligopoly Market:
The oligopoly market refers to the situation where only a few firms participate for most or all of total production. In this market, these few firms earn a substantial profit in the long run because the barrier to entry makes it very difficult to enter new firms in the market.
(e)
The type of market for gym membership in a town with one gym belongs is to be determined.
Answer to Problem 1SPPA
Explanation of Solution
Gym membership in a town with one gym belongs to a monopoly market. Since there is only one gym in a town, with no substitute and the owner has complete control over its price.
Monopoly Market:
Monopoly market refers to the market situation where a single firm enjoys the largest market share by selling the commodity which has no close substitute and the entry for new firms in the monopoly market is very difficult.
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Chapter 15 Solutions
Foundations of Economics, Student Value Edition (8th Edition)
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