Question

For each of the following questions, match the industry to the likely competition type. 

Part 1 

Municipal utilities (e.g., power, sewer, garbage collection): 

Part 2 

Commodity farmers (e.g., potatoes, corn, wheat): 

Part 3

Clothing retailers (e.g., Old Navy, Macy's, JC Penny):

Answer 1

Municipal utilities : Monopolists

A monopoly is when there is one producer or service provider in the market. The garbage industry for collection and processing garbage is done wholly by the municipalities.

Commodity farmers : Perfect competitors

There are many small firms and many buyers, and the good sold is identical. This is true for most farm produce.

Clothing retailers : Monopolistic competitiors

There are many small firms and many buyers, but products are differentiated and not identical. This gives some price power to monopolistic firms.