The article attached provides material for a case study dealing with competition and competitive markets. Provide brief answers to the following questions. Make any assumptions you may need to answer the questions.

Questions:

1. What information would be required to determine whether the poultry processing market, which produces "disassembled bird parts," is (perfectly) competitive? Briefly explain the significance of whether this market is competitive or not.
2. Now, assume this market is competitive. Based on this assumption, describe the short-run equilibrium for both the market and a typical processing firm. Using a graphical or algebraic approach, interpret and explain the key features of the equilibrium.

Are consumers getting plucked at the chicken counter? A glut of chickens that has built partly because of foreign fears of avian flu is slashing the prices that poultry processors get for some parts of disassembled birds to the lowest levels in three decades. But retail prices aren't falling at the same speed, according to government economists. A price break would be a big deal for consumers. Americans eat more chicken than any other meat - nearly 86 pounds per capita last year -- and spend roughly $50 billion annually for it. The price charged by processors for whole broilers is 19% lower than it was a year ago, with parts such as breasts and legs dropping 24% and 36%, respectively, in the same time period. Retail poultry prices will slip no more than 1% from last year, according to forecasts by economists at the Agriculture Department. In many supermarkets, chicken still commands lofty prices. Safeway Inc. in its Dominick's stores in suburban Chicago has been charging $5.49 a pound for Perdue brand boneless, skinless breasts. Customers with a loyalty card have been paying $4.99 a pound. Safeway has cut the price on its house brand of boneless, skinless chicken breasts for one week to $1.99 a pound from $3.99 a pound. But a spokesman for the Pleasanton, Calif., company wouldn't comment on whether it has plans to lower retail prices of Perdue chicken products, for which Safeway pays a premium The National Chicken Council, the trade group representing processors such as Tyson Foods Inc. and Pilgrim's Pride Corp., doesn't comment on retail prices. But livestock analysts think a corresponding drop in retail prices would increase consumer demand enough to help reduce the chicken glut. "I think the retailers aren't competing nearly as aggressively as they used to," says Dan Vaught, a livestock analyst at A.G. Edwards & Sons, St. Louis. U.S. supermarket chains are leery of talking about pricing. Kroger Co., the nation's largest supermarket chain by sales, wouldn't comment. Officials atSuperValu Inc., which is seeking shareholder approval to acquire 1,100Albertson's Inc. stores in a deal that would make it the No. 2 supermarket chain in sales, couldn't be reached for comment. For fast-food chains, the big wholesale-price drop couldn't have come at a better time. McDonald's Corp., Burger King Corp. and Wendy's International Inc. have been putting more chicken on their menus to appeal to health-conscious diners and are continuing to charge premium prices for chicken sandwiches. Cheaper chicken is also benefiting Yum Brands Inc., parent company of KFC, Taco Bell and Pizza Hut. The Louisville, Ky., company expects the cost of chicken to drop this year, but it won't give details. A Yum spokeswoman didn't respond to questions about whether its fast-food chains are rolling back any retail prices of chicken products. Chick-fil-A Inc., the No. 2 fast-food-chicken chain, isn't offering customers discounts, even though the Atlanta company has benefited from softening wholesale chicken prices, says spokesman Don Perry, "We don't do a lot of couponing, and in situations like this, we wouldn't want to change our strategy -- just as when prices are going in the reverse, we're very slow to raise prices," he says. Unbeknownst to most Americans far removed from farms, the prices of commodities such as milk, cattle and hogs are sinking for farmers this year. Charlton C. Copeland, a 31-year-old assistant professor of law at Northwestern University, wasn't looking for a bargain when he recently shopped for boneless, skinless chicken breasts at a Chicago supermarket. Told of the big drop in wholesale prices, he was taken aback by the price on the package. "We're spending all our time worrying about rising gas prices," he said. "But we're not upset about being charged this much for chicken?" Earlier this decade, the nation's bigger supermarket chains were under far more pressure to quickly pass along any savings to consumers. The emergence of discount maverick Wal- Mart Stores Inc. as the nation's largest grocer fueled price wars with traditional supermarket chains. In response, some chains are remodeling stores to emphasize that they offer more variety and service than discounters. Safeway and others tout their butchers to differentiate themselves from Wal-Mart, which sells prepackaged meat. A Wal-Mart spokeswoman says the company's "business culture" is to pass along savings to consumers. Some Wal-Mart Supercenter stores in lowa, Texas and Georgia are selling Pilgrim's Pride boneless, skinless chicken breasts this week for anywhere from $1.67 a pound to $2.90 a pound. The U.S. poultry industry exports about one-third of its legs and thighs. Poultry processors cut their prices over the winter because consumers in Europe were reducing consumption of chicken as the deadly Asian H5N1 strain of influenza spread there in wild birds and poultry. While consumer demand seems to be recovering in Europe, the tough times will likely dragon for processors, partly because the industry has a hard time cutting production. Farmers who grow chickens for the processors are relatively insulated because they work under long-term contracts