Examine a perfectly competitive firm that you have recently purchased a product from, focusing specifically on how it relates to the characteristics of the market.
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First, we need to realize that there are not really any firms that are selling to consumers at the retail level who are in perfect competition. Perfect competition is more of an ideal type that does not truly exist in the real world. However, there are some industries that come close to being perfectly competitive.
One industry that comes close to being in perfect competition is the gasoline industry. Gasoline is generally a homogenous product. One kind of 87 octane gas, for example, is essentially the same as another brand. There are many small firms that sell gas. You can find many small gas stations in every town of any size. The barriers to entry are not terribly high. This is, however, where gas stations depart most from perfect competition. You do have to have a fair amount of infrastructure in terms of tanks and pumps to enter. However, the barriers to entry are not nearly as high as in some industries.
Thus, the retail gas industry is something that comes as close to being perfectly competitive as anything else.
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