gina lopes

April 22, 2013

Individual Assignment 1

1
The chlorine market is kind of a purely competitive market because of the following. Lots of competitors, no single competitor has the control, everyone’s products have the same and no cost if you enter or leave the market. There are lots of chemical companies; every supplier has the same standardized products, because it’s an element. No chlorine maker controls the price, it’s a take it or leave it, it’s not hard for a supplier to enter or exit the chlorine industry. It doesn’t take a big profit to start the chlorine business. Both buyers and sellers have full and equal information about the product.
2
Revenue should be able to cover its explicit cost by paying its workers and rent. As well as its implicit cost to return its entrepreneur and capital which makes its normal profit.
3
The competitive market seller is a price taker because its a purely competitive market. All businesses have the same simple recipe for it, and since its a fairly easy business to get into with little investment it's take it or leave kind of thing. Since no single busineesses is better than the other which makes it a competitive market since its the product, no one has the power to increase prices without losing consumers because everyone else is offering it at the same cheap price. For example Walmart, target both sell the same mcarther milk, regardless of where you go it's the same exact milk so the buyer can either take ir or leave it. Therefore the seller is a