Question

What elements of the Aalsmeer flower auction are there that do not fit the model of perfect competition? What other market besides agriculture, are there that is close to a perfect competition?

Answer 1

Solution:

The element in Aalsmeer flower auction that donot fit into model of perfect Competition is bidding. Flowers are auctioned and highest bidder gets the flower. In perfect completion, it is assumed that sellers and buyers are price taker but in the auction price is not given. Hence flower auction market is not perfectly competitive.

Market of carwash in City is perfectly competitive. similarly cloth market with same cut and fabric is perfectly competitive although they come in different brands.