there is a clear relationship between the price-making ability of a firm and the degree of competition in that particular industry. The majority of real-world firms fall somewhere between the two extremes of perfect competition and monopoly; as such, their price-setting ability lies somewhere between "not a lot of control" and "quite a bit of control" depending on the degree of competition.

Take a moment to think of a local business that you have visited over the past few weeks.It can be a small business, such as your local dry cleaner, or it can be a very large business such as a big-box discount chain store.

In your journal response, please answer the following questions:

• Which business have you chosen, and why did you think it was a good choice for this discussion prompt?
• How many competitors does this firm have in your town?
• Based on the size of your town and the number of local competitors, do you think this business has more or less competition than an average business of this type? (For example, if you chose a dry cleaner in a small town there is likely very little competition; if you chose a dry cleaner in NYC, that is a very different story!)
• How much power does this business have when it comes to setting prices for the goods that it sells? In addition to the industry size, discuss the price elasticity of demand for the goods or services offered by this business.