Amy chang wants to start a business supplying florits with field grown flowers. Sje has located an appropriate acreage and beleives she can grow dasies, asters, chrysanthemums, carnations, and other ssorted types during a nine onth growing period. By growing the flowers in a field as opposed to a greenhouse, Amy expects to save a considerable amount on herbicide and pesticide. SHe is considering passing the savings along to her customers by charging 1.25 per standard bunch versus the prevailing price of 1.50 per standard bunch.

Amy has turned to her neighbor, Bob Winters for help. Bob is an accountant in town who is familiar with general buiness conditions. Bob gathered the following information for Amy:

a. There are 50 growers within a one-hour drive of Amy's acerage

b. In general, there is little variability in price. Flowers are treated as commodities, and one aster is considered to be pretty much like any other aster.

c. There are numerous florits in the city, and the amount Amy would supply could be wasily ansorbed by the florits at the prevailing price.

Questions:

What type of market structure characterizes the flower growing industry in Amy's region?

Given your answer to question 1 what price should Amy charge per standard bunch? Why?