The industry is WINERIES (NAICS 31213)
1.Evaluate your project industry using the five assumptions of perfect competition. Make sure you give empirical evidence when possible (or what empirical evidence would be needed if not possible) in making your evaluation. Example, If my Industry in “electric utility” then to show 1. Large number of buyers and sellers, I would give: Seller, is a monopoly (1 seller -Con Edison); number of buyers are: 3.3 million.
Five assumptions are: 1. Large number of buyers and sellers; 2. No significant economies of scale; 3. Easy entry and exit (no entry barriers); 4. Homogenous product and 5. Perfect information).
Part 2 (answer 2 out of 4 questions). (2 pages per question)
2.Using the preconditions and types of price discrimination, access the possibility or reality of price discrimination in your industry. For each provide evidence (or what evidence would be needed).
3.Empirically demonstrate what factors will increase the demand for the primary product or service of your industry.
- Assuming that there is a 50% increase in the demand for the primary good or service of your industry, what will be the major challenges in meeting that demand. In other words, how elastic is your supply curve. When possible, base your analysis on evidence.
- Assess the role of advertising in your industry, using the arguments for and against advertising we discussed in class.