Reference no: EM133083250

Imagine yourself as a street food vendor, selling tacos topped with fried onions, ground meat, cheese, fresh tomatoes and dollops of guacamole and spicy sauce in the main plaza of a town close to the border of Mexico. There are three other taco vendors on the other corners of the plaza selling the exact same thing of the same quality. None of the other vendors (nor you) can change the price, because everyone knows that the deal is 3 tacos for $5. Anyone else who wants to sell tacos on the street can do so, and if you want to quit and sell something else one day (or sell your tacos at one of the many other public spaces in your town), no one is stopping you. A business expert might describe this as perfect competition (or a perfect market or pure competition), which means an equal level for all firms involved in the industry. But what does that really mean?