Homework? Perfect Competition (Ch 09) The theory or perfect competition is based on the following four assumptions: 1. There are many sellers and many buyers, none of which is large in relation to total sales or purchases. 2. Each firm produces and sells a homogeneous product. 3. Buyers and sellers have all relevant information about prices, product quality, sources of supply, and so forth. 4. Firms have easy entry into and exit out of the market. A perfectly competitive firm is a price taker, which is a seller that does not have the ability to control the price of its product: in other words, such a firm "takes the price determined in the market. Identify whether or not each of the following scenarios describes a perfectly competitive market, along with the correct explanation of why or why Scenario Perfectly Competitive? Yes, meets all assumpts Yes, meets all assumptions A few major airlines account for the vast majority of air travel. Consumers view all airlines as providing basically the same service and will shop around for the lowest price. The government has granted the U.S. Postal Service the exclusive right to deliver mail. There are hundreds of high school students in need of algebra tutoring services in Detroit. Dozens of companies offer tutoring services, and the parents who seek out tutors view the quality of the tutoring at the different companies to be largely the same. There are hundreds of colleges that serve millions of students each year. The colleges vary by location, size, and educational quality, which allows students with diverse preferences to find schools that match their needs