Perfect Competition :: Brisbane Australia Restaurants

Brisbane, Australia, is the third largest metropolis where it serves up some of Australias best culinary finds. There is a marvellous collection of Brisbane restaurants with e actuallything from stylish boutique eateries featuring top chefs from around the population to local diners than feature Australian specialities (ABC Integra, 2004). This essay allow for discuss the extremity to which restaurants in Brisbane match the characteristic of a perfectly competitive industriousness both in the short and long run. Following that, this essay will elaborates on the pros and cons from an economic perspective, the characteristics of a perfectly competitive industry. Comparison among perfect competition and noncompetitive along with examples will also be given to further illustrate the best market structures that fit out restaurants in Brisbane. It will then be concluded that restaurants in Brisbane does non fit the characteristics of a perfectly competitive industry but rather a mon opolistic industry as the only similarity between restaurants and a perfectly competitive industry is the large number of participants involved. Diagram 1.0 utter(a) Competition Perfect competition (as shown above) is a market structure characterised by a large number of small firms, a homogenised harvest-feast, and very easy entry into, or exit from, the market (Layton, Robert & Tucker, 2002, p.173). The characteristic of a large number of small firms is fulfilled when each firm in a market has no significant share of total rig and has no ability to affect the products market price. all(prenominal) firms work autonomously, rather than coordinating decisions collectively (Layton, Robert & Tucker, 2002, p. 173). Restaurants in Brisbane do not fit this characteristic as restaurants are more fitted under monopolistic competition exist under a large number of firms where no single firm can influence the market outcome. For example, Michaels riverbank in Brisbane serves some of th e areas best seafood (ABC Integra, 2004). Even so, Michaels unable to influence the market outcome, but is able to set the prices high than rival restaurants without fear of losing its customers. This is due to product differentiation (Layton, Robert & Tucker, 2002, p.233). Consumer demand for tell products is described using two distinct approaches the heterogenous demand and homogenous demand. The heterogenous demand assumes that each consumer has a demand for multiple varieties of a product over time and the homogenous demand assumes that each product consists of a collection of different characteristics such as in location, atmosphere, prime(prenominal) of food, style, services and price (Suranovic, 1997).