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 not. Scenario Perfectly Competitive? 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. Yes, meets all assumptions 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. 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 Miami. Dozens of companies offer tutoring services, and the parents who seek out tutor

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.

In this scenario we do not have a perfectly competitive market, but monopolistic competition. Customers still have a good deal of power, because they see all airlines as substitutes for each other, and shop around for the lowerst price. However, the number of airlines is still limited, which keeps the prices from falling as much as they would if there were more airlines.

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.

This scenario shows a perfectly competitive market. The suppliers: the colleges, are many, and each offer a different quality to the customers: the students. The colleges are price-takers because there are many competitors, customers have a great deal of power, and they try to attract the customer by differentiating themselves in things other than price (location, size, educational quality).

The government has granted the U.S. Postal Service the exclusive right to deliver mail.

This is a monopoly, the farthest thing from perfect competition. In theory, the U.S. Postal Service could charge any price for its services, because it is not a price-taker, since there are no competitors.

There are hundreds of high school students in need of algebra tutoring services in Miami. Dozens of companies offer tutoring services

This is also a perfectly competitive market, similar to the college market above. The amount of tutors is vast, so all of them are price-takers, and try to attract the students with things other than price.

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