SAINT ECO202 MODULE 5 TO 8 DISCUSSIONS

Search the web and view the video clip 1,000 Flowers Auctioned per Second in Holland. Then research the Aalsmeer flower auctions in more detail.

What aspects of perfect competition do you see present in the Aalsmeer flower auctions? Since there is no truly perfectly competitive market in the world, but rather markets that approach this extreme, are there any elements of the Aalsmeer flower auction that you find do not fit the model of perfect competition?

Describe another industry that you find fits the model of perfect competition.

After watching the video clip from Forrest Gump, consider that Forrest’s good luck of “being in the right place at the right time” allowed him to operate as a monopoly. Typically, the fishing industry is a highly competitive industry where economic profits are rarely made in the long run. However, in a twist of fate, Forrest’s boat is the lone survivor after a hurricane washes ashore and destroys all the other shrimp boats.

Consider the barriers to entry facing potential competitors in Forrest’s monopoly market. The more contestable a market, the closer it will be to a perfectly competitive market, whereas the less contestable a market, the closer it will be to a monopoly.

What barriers to entry exist in other industries that allow certain firms to operate as a monopoly? Are these barriers contestable?

After watching the video clip from The Corporation, consider that labor is a derived demand. What forces are at work demanding low-skilled labor in the developing world? What could a country do to improve the types of skills demanded of its labor?