The Gippsland region in Victoria produces a lot of potatoes from many potato farms.Suppose the sole input into the production of potatoes is the labour required to harvest.Which of the following statements regarding market structure do you think is most likely the case?

Question

Quizplus · Accepted Answer

If the market for potatoes is competitive, then there are many potato farms competing against each other to sell their potatoes. This means that no single farm has market power to control the price of potatoes. If the market for potato pickers is also competitive, it means that there are many workers who are willing to work as potato pickers, and they can compete against each other to find work. This helps to ensure that the wage rate for potato pickers is determined by market forces, rather than being set by a single employer with market power. Overall, a competitive market for both potatoes and potato pickers is the most likely scenario in this case.

The Gippsland Region in Victoria Produces a Lot of Potatoes