Aalsmeer Flower Auctions and Perfect Competition
A perfectly competitive market is usually characterized by a significantly large number of sellers as well as buyers, production of similar items, fluctuating prices, proper knowledge of the market, and provides freedom of entry and exit by any firm (Kononenko & Kugai, 2019). Aalsmeer Flower Auctions’ marketing environment has some, if not all, of the given features. At least 39 auction clocks are usually operational at Flora Holland each day, which accounts for about 125,000 auction transactions. The high number of watches at the selling center implies an immense amount of sellers, and the large sales translate to the number of buyers who visit the place to get their orders.
The fluctuating price of the flowers equally sets the Aalsmeer Flower Auctions into being considered as an example of a perfect competition market. The costs for the flowers are entirely based on the demand, and at no point in time have they been set to a constant figure. The sellers would slowly adjust the prices from high to low until they successfully sell their flowers. The homogeneity of products is equally practiced within the Aalsmeer Flower Auctions as there is only a single item being transacted upon, the flowers. Nonetheless, the customers who daily stream into the market usually have enough information on the kind of flowers they want, their quality, and the prospective prices (Manikas et al., p. 1017).
The foreign exchange market is another ideal example of a company that operates in a perfect competition market as the Aalsmeer Flower Auctions. The currency is the main product of trade within this market and is, of course, homogenous. All the individuals trading their money have access to a massive number of buyers and sellers. Sufficient information about the value of each currency is provided frequently to guide the buyers and sellers in their transactions. In other words, the prices for acquiring money within the foreign exchange market keep changing.