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Characteristics and comparison of a perfectly competitive market

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With something like BH, the nature of "product" and "consumer" can get a bit murky. Make sure you go over that carefully.

Three characteristics of perfect competition:

The firm cannot really affect prices because it is such a small component of a large market. Too many other firms.
There is not much in the ideal theory of perfect competition that could ever apply to Buffet's Berkshire Hathaway. It is an oligarchic firm in an oligarchic world. This would be the case even if it were not controlled by media celebrities such as Buffet, Gates or Kewet. Adding that kind of media clout gives new meaning to oligarchy and oligopoly. Thus, even if BH was one of many holding firms, the very media presence of Buffet could not only affect prices, but can alter the market. USA Today has a regular feature called "Warren Buffett's Favorite Stocks." The point being, of course, that his very word can shift money from one sector to another. An entire line of books is dedicated to his investment philosophy.
Newspapers and magazines will pay anything for some folksy quote about wanting cash over equity. It does not matter, so long as it has Buffett's name on it. Wyatt Research, a stock analysis firm, states it bluntly: "No investor in the history of the world has wielded more power and influence on Wall Street than Warren Buffett." This refers only to his personality and success. It does not take into consideration the huge number of blue-chips he owns. Therefore, he is the very opposite of a perfectly competitive market player: he manipulates and controls markets whether he wants to or not. He does not just influence prices, but entire sectors.

All firms produce totally standardized object. Buyers are thus indifferent to which firm they patronize.
The "product" here is not easy to ...

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