Is eBay a good example of a perfectly competitive market?

Answer 1

EBay is not a perfect competitive market, because competiters in that industry of online bidding firms can alter their services to be unique. A perfect competitive market must have all identical firms within it.

Answer 2

No.

A perfectly competitive market is one that has the following characteristics:

• Many buyers/Many Sellers -- Ebay has this for some goods that are for sale, but often the items on eBay are either one-of-a-kind, or only sold by one seller, which makes it not competitive.
• Low-Entry/Exit Barriers -- Ebay requires sellers to set up accounts and register personal information, but it is still a fairly low entry barrier. There are virtually zero exit barriers.
• Perfect Information - (Prices are assumed to be known to all consumers and producers) Ebay does not have this as the final sale price is not known until the sale is completed. People may see an item listed at $10, decide they are willing to spend $11, only to discover that the product is now listed at $12, through auto-bidding.
• Transactions are Costless - Ebay charges sellers for each sale.
• Firms Aim to Maximize Profits - On Ebay, firms do not always sell where marginal cost equals marginal benefit, and hence do not maximize their profits.
• Homogeneous Products -- (The characteristics of any given market good or service do not vary across suppliers) The Ebay feedback system can show you that not all sellers provide the same quality goods and service.

Answer 3

Yes it is because you are just battling against someone else to buy something that may not be worth that much as you are bidding for