Name _________________________ Class _______________ Date _______________
CHAPTER
7
S
1
STUDENT ACTIVITY
Perfect Competition
ECTION
Directions: Read the description of each market below. Then tell
whether the market is an example of nearly perfect competition.
Explain your answer. Use complete sentences.
1. Aspirin is one of the most widely used drugs in the world.
Although many companies make and sell aspirin, all aspirin
is pretty much the same. Because aspirin is a drug, the
government has some control over companies that make it.
Is this an example of perfect competition? Why or why not?
2. Wheat is one of the most important farm products in the
United States. Many farmers grow wheat. Many companies
buy wheat for breakfast cereals, bread, flour, and other
products. Wheat is a commodity—the same product no matter
who grows it. Information about wheat output and prices is
widely available. In any given year, farmers may grow wheat
or some other crop. Buyers may switch to other grains if wheat
prices rise too high.
Is this an example of perfect competition? Why or why not?
3. Two firms, Boeing and Airbus, produce most large passenger
airplanes. It costs billions of dollars to develop a new type of
airplane. One airplane can cost more than $260 million. The
competition between these two firms is fierce.
Is this an example of perfect competition? Why or why not?
Copyright © by Pearson Education, Inc., or its affiliates. All rights reserved.
132
2