Agriculture, in many cases, is a perfect competition market. For example, oranges and corn are grown throughout the world, and the market sets the price, with no firm being large enough to affect pricing. As such, these farmers are able to sell all of their product, at the prevailing market rate. I want you to read the two scenarios below, and then comment on which one you feel is best. Additionally, I want you to defend your position, making sure to highlight your thought process; point out the pros and cons, of each scenario. It would also be beneficial to use the textbook to help defend your position. HINT: There is NO correct answer.

Case 1 - The oranges market is a perfect competition market, with all firms of equal size. They are spread out throughout the world and none of them are of a size that may affect pricing. Therefore, the market sets the price.

Case 2 - Several very large firms control the orange market - similar to an oligopoly (see textbook for definition). These firms have farm land in several different countries. As such, they are large enough to where they may affect pricing, if in fact, there is an issue with their crop output, for example.