THE CANADIAN BAKING INDUSTRY: A STUDY OF AN IMPERFECT MARKET.

This article focuses on the baking industry of Canada. The absence of the conditions of pure competition from many industrial markets, and the consequent failure of the theory of pure competition to explain the determination of prices in these markets, has stimulated the growth of new theories of monopolistic competition. The Canadian baking industry seems admirably suited to serve as such a test case. The history of the industry over the past two decades is filled with apparent paradoxes: the co-existence in the same market of several prices for bread of approximately the same quality; price-agreement among bakers over considerable periods, interrupted by severe price-warfare. The typical bakery of pre-war days was a small individual enterprise, operated by one or a few men. The expansion of the urban market and the growing practice of shipping city-baked bread to towns in the vicinity opened the way for the development of the large concern.