ECO 500: Essay analyzing Perfect Competition and the features of Agriculture in Nepal

ECO 500: Major Project A

Due:  Sunday 28th August 2022 Midnight

Worth 20%

Essay analyzing Perfect Competition and the features of Agriculture in Nepal.

FILL IN THE BLANK SPACES from the References (given to you in Moodle)

NOTE there are many correct answers, so do your own.

Copied answers will fail and may receive 0/25

INTRODUCTION- 5 sentences.

Fill this out after you fill in everything below

AN EXAMPLE introduction- The following analysis and description considers the characteristics of perfect competition. This is compared with the features of farms and farming in Nepal……..

Characteristics of Perfect Competition

  • Many Competing firms, businesses, or farms.
  • Similar products sold e.g., vegetables.
  • Many substitutes for products so products have price elastic demand.
  • Equal small market share of each business. E.g. each farm grows only 0.0001% of rice in Nepal
  • Sellers are price takers -they do not or cannot determine the price they receive for their produce.
  • Ease of Entry (unused land can be planted with crops) and Exit (land can be left fallow-grows nothing).

All that you need to do is to copy and paste these characteristics into you answer


A Farm making a LOSS ust copy and paste this diagram into your answer

A Farm making

a good PROFIT

A Farm

just breaking even

Use the diagrams above to distinguish between farms and therefore farmers who make:

  1. A loss
  2. A minimum profit
  3. A reasonable profit

How does (Select at least 2 (you can consider more than 2) of the points below) affect the profitability of farms?

Find the answers out from the references

  1. Farm size- explain how farm size affects profit
  2. Farm location
  3. Type of crop grown
  4. Changes in consumer’s demand
  5. Changes in costs of production and number of farms producing the given farm product
  6. Other factors

Based on your comparison is agriculture in Nepal a perfectly competitive industry? Justify your conclusion.

You can answer this in the table below or in a separate word document answering each question. Answers come from the references

Characteristics of a Perfectly Competitive Industry – FarmingFeatures of Farming in Nepal that is an example of this characteristic ANSWER THESE QUESTIONS EITHER IN THIS TABLE OR SEPERATELY BELOW AS A WORD DOCUMENT
Many Competing farms.How many farmers are in Nepal? What % of Nepal is cultivated? % Arable land not cultivated = fallow land that can be used for farming?
Similar products sold e.g., vegetablesWhat crops are grown in Nepal? Is there any product that Nepal dominates in and perhaps has an advantage in?
Many substitutes for products so products have price elastic demand.From products grown are their similarities. E.g. grain crops – e.g. rice wheat etc
Equal small market share of each business.What is the average size of farms? Are there many big farms or are the majority small?
Sellers are price takers. Products often sold through agents or middlemen. Often under contract.

This is the key answer to this question!
What factors affect supply and demand for agricultural crops in Nepal? In table. SUPPLY DEMAND How do middlemen (they sell the crops on behalf of the farmers) affect prices received by farmers? How does corruption affect the Price received?
Ease of Entry (land can be planted with crops) and Exit (land can be left fallow).If there is fallow unused land, then there is ease to enter? If new generation of young people do not wish to farm- this is a barrier. Explain this.

Is agriculture in Nepal a perfectly competitive industry? Justify your conclusion using your answers in the table above.

To answer this question briefly make a conclusion based on the above table

Perfect Competitively businesses have no control over the price that they receive for their products when sold- is this true for Nepalese farmers?

The answer will be YES but you have to explain why you say YES.

If the answer to the above is true describe why prices are controlled by factors outside the farmer’s control.

What are these factors?

In what ways does the government in Nepal affect agriculture and farmers- (investigate price support and subsidies)?

Define and explain how the government affects agriculture using subsidies and price guarantees using the TWO diagrams below. Copy and paste the diagrams into your answer.

These diagrams will be explained in week 6

In what ways do Middlemen affect the price farmers in Nepal receive for their farm produce when sold?

OVERALL CONCLUSION to your answers

Farming in Nepal is Perfectly Competitive however because of middlemen and corruption they have even less control over farm produce prices. Explain what is the problem with this?


Include reference to the articles and other sources that you used to find answers from.


THERE IS NO ISSUE ABOUT WORD LIMIT- except for excessive words like 2000-2500 words

ALSO, NO REAL ISSUE ABOUT SIMILARITY EXCEPT IT SHOULD NOT BE over 80- and definitely not 100% (100% =0/25)

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