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Chapter 7: Q.2 (page 211)

Would independent trucking fit the characteristics of a perfectly competitive industry?

Short Answer

Expert verified

As a result, independent trucking fits the profile of a highly competitive business.

Step by step solution

01

Introduction

Perfect Competition refers to a market situation in which there are a large number of buyers and sellers, all of whom have perfect knowledge of the market, commodities are homogeneous, and all enterprises are price takers.

02

Explanation

Independent truckers are typically small sellers with a wide number of customers. They could be among the many other sellers that are self-employed and offer the same service of moving goods between two sites with the same type of truck. They'll all be "price takers" because they're all providing the same service.

Anyone interested in working in the industry only needs a truck and a driver's license. Those who want to leave need only sell the truck.

As a result, independent trucking fits the profile of a highly competitive business.

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