Is This Perfect Competition?
Class Activity
DIRECTIONS
Several markets are listed below. Use the characteristics of perfect competition to decide whether each market is perfectly competitive or not. There are questions for each characteristic of perfect competition for each market.
Characteristics of Perfect Competition
Numerous Sellers

Standardized Product

Free Entry and Exit

Perfect Information

All Firms Are Price Takers

1) MARKET FOR STRAWBERRIES

A) Are there a lot of farmers of strawberries?

B) Are strawberries all the same?

C) Are farmers able to start or stop growing strawberries from one season to the next pretty easily?

D) Do producers and consumers know the price for strawberries?

E) Do all strawberry farmers sell their strawberries for roughly the same price?

F) If you answered yes to most of the above five questions, the market for strawberries is likely perfectly competitive. Do you think the market for strawberries is competitive? Explain.