Question

For each of the following, is the industry perfectly competitive? Referring to market share, standardization of the product, and/or free entry and exit, explain your answers.

a. SUVs

b. Adele concert

c. Aspirin

Answer 1

a> No

There is a few numbers of manufacturers of SUVs, it is so because the market is profitable only when a large number of cars are sold and there is the problem of market asymmetry between buyer and sellers.

b> No

Adele is the only person who can create/produce those concerts, so it can be thought of as a monopoly than any kind of competition.

c> Yes

Aspirin is a generic drug, it can be produced by anyone and sold in the market, thus it is a perfectly competitive industry.