Perfect Competition

[agunn1231]

In my economics class we are learning about perfect
competition, we had to read a blog, and the author of that blog stated that "Competition is ... competition, so what makesperfect competition different from all other forms or kinds of competition?  According to economists - because it is so competitive that any individual
buyer or seller has a negligible impact on the market price.  Products are
homogeneous, or composed of parts that are all of the same kind.  Product
and pricing information is also perfect in that everyone, including the ultimate purchaser
knows everything about the products, including the best prices available in the
market. " and this made me think of the hookah industry. By this i mean
that vendors all have about the same price points, there is almost no way for
one company to lower their prices for an extended period of time, wiothout
either selling out of a product or every place else lowering their prices as
well. It also goes with price increases. THis isnt just evident online either,
locally there are two shops near each other that will sell the same hookahs as
online vendors for the same price, or if you are in with the owner a slightly
lesser price, this is evident with vendors too and the discount codes that
places offer for loyalty to their company. One thing that really stood out
regarding the hookah industry when i was learning about perfect competition was
Tang bowls. The fact that they are all 29.99 now as opposed to what, 14.99 a
year ago, and that there is no room to lower the price on them because they
would sell out overnight it that happened. I dunno maybe i am way off in
relating the hookah world to perfect competition, but from what i have learned
so far, hookah does seem to be in a state of perfect competition. Especially
when i learned that companies make minimal profits because there is not much
flexibility between vendors prices. Anoter aspect of perfect competition that
stood out to me is that each place has the exact same or nearly exact same
selection on pipes be it KM or Mya or generic chinese pipes. What are some of your guys thoughts on these ideas and connections i have made, am i right/ wrong?  

[Pavo21]

yes

[agunn1231]

good to see a reply. lol

[Tyler]

Not the way I see it. I might be wrong in my understanding but there are other bowls that can be bought for a different price no matter what price point a certain vendor sets, Also, supply is technially not limited since it can and will be reproduced. Holding supply at high price reduces an overcome of overhead payout for initial product thus a loss of money, if by no other means than by space to store new/additional product and interests on money for current stock being unsold.

[Pavo21]

good to see a reply. lol

 

only reply that is acceptable, perfect competition is rare and unique. that is all.

 

dont wanna get heavy in this subject 

[agunn1231]

I know it is rare, if at all possible, However many aspects of the industry struck me as fitting. especially when what we were learning in class related to the bicycle industry. After that I felt i needed to post and get other peoles viewpoints as well.