Perfect Competition Research Paper Example | Topics and Well Written Essays - 750 words

Perfect Competition - Research Paper Example So for argument’s sake, we’ll consider the farming sector, and focus on claims on â€Å"Eggs† as the primary example. Eggs are a basic food item in the USA and around the world, and it’s known for its high nutrition value and edibility. Eggs are sold across the USA in almost all convenient stores, and consumed on a daily basis by end users in various forms. Not only that, but many large corporations also engage in B2B transactions with egg suppliers as the product is also used as raw material for other products such as cake mixes, mayonnaise, salad dressings etc. Thus buyers of this product are seemly infinite. The sellers of this product include poultry farmers across the country. Also, large corporations have entered this industry for the sole purpose of egg production, utilizing the concept of battery cages for efficient and expedited production. A survey conducted in the year 2008 yielded results that there were around 287million hens involved in meeting the egg production requirements of the country, a population of over 300 million people. This implies that the egg production in the US A more than abundant. The primary production is done via farmers and the automated plants, but the retailers and wholesalers are the channel through which end-users make the purchase. The situation is such that the USA exports some of its production, which in essence generates a very minimal supply-demand gap. 2) When considering barriers to entry and exits, the market entails high entry costs for both engaging in poultry farming and battery cages. However retailers and wholesalers avoid this cost, but at the same time incur costs of packaging and displays. 3) Factors of production are not very mobile short-term in the sense that if there was a sudden increase of 20% in the demand for eggs, the supply wouldn’t increase immediately. However, in the long run the production could be maneuvered to meet the demand as best as possible. 7) Eggs are a standardized product