Appear to be examples of competitive markets

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Grocery stores and gas stations in a large city would appear to be examples of competitive markets. There are numerous, relatively small sellers, each seller is a price taker and the products are quite similar.

a. Is is possible these markets are perfectly competitive? How could we argue that the firms face a demand curve that is not perfectly elastic? Use the definitions and characteristics of the differenct market structures to justify your reasoning.

b. How profitable do you expect grocery stores and gas stations to be in the long run?

Reference no: EM131098861

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