lack of a competitive market

I like to throw in an economics lesson every once in a while. This Thanksgiving I have been presented with the perfect opportunity. If you don't find this interesting you might like Freakonomics; the authors' examples are a little more impressive than mine.

I have chosen to celebrate Thanksgiving in London. I thought it would be fun to introduce my friends here to the holiday. (I've never cooked any Thanksgiving dishes at all so this will be quite the experiment.) The first test was finding a turkey. Obviously not everyone here is buying them at this time so I had to special order it from a butcher. That's when I realized this was going to be an expensive party!

In American turkeys are being advertised for 57 cents per pound. That's less than $15 for a 15 pound turkey. All economic theories are based on a perfectly competitive market but in the UK the turkey market is not perfectly competitive. Since not everyone here is buying one, sellers do not have to be especially competitive when it comes to the price. This causes the price of turkeys to be unfortunately high.

A second possible reason for the high price is the bird flu epidemic that is happening here. This essentially causes a shock to the theoretical production function of turkeys. This causes the supply of turkeys to be low and therefore drives up the price. All of this, combined with the imperfect currency market means that my turkey will cost about 10 times as much as a turkey in the US.

Happy Thanksgiving!