The perfect competition market is considered the most competitive market out of all four main market types (McEachern 341). In saying this, it also the rarest in existence, most economists consider any market to be in just near perfect competition as a firm will closely satisfy the five main characteristics of a market in perfect competition. The five characteristics are that the market has many buyers and sellers, the products are homogenous (identical), easy barriers of entry and exit, its firms are price takers, and the consumers have all the information needed of the product (Kaplan). The agricultural industry is closest in having all these characteristics. Companies such as Accomazzo & Legacy Farming, one of the oldest in the state of Arizona, has had over 40 years of experience in the production of wheat as well as other commodities. The world market of wheat is a good example of a near perfect market. One can choose to open a farm and start growing and selling wheat and easily choose to stop and wheat is a commodity as in it is no different than another farms’ wheat (Kaplan).
There are countless numbers of wheat farms in the world and thus many buyers and sellers. It would be prudent for Accomazzo & Legacy Farming Company to choose not to choose the price in which to sell his/her wheat instead let the market decide the price for wheat. The price is fixed on the equilibrium of the supply and demand of wheat at the given time (McEachern 341). If they choose to sell its wheat at a higher price then consumers can choose to purchase the wheat from a different farmer. This being that the farming company is a price taker not a price maker. Selling the wheat at market price will increase their profits in the short run...
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