0
Price is determined by the market and Output level is the only choice the firm has to make. Since firms want to maximise profit, it will produce at a level where Marginal Cost equals Marginal Revenue. This is the profit maximisation point
Under the perfect competition sellers will reduce prices in order to sell more than their competitors.
What else can I help you with?
How are price and output determined under pure or perfect competition?
Price is determined by the market and Output level is the only choice the firm has to make. Since firms want to maximise profit, it will produce at a level where Marginal Cost equals Marginal Revenue. This is the profit maximisation pointUnder the perfect competition sellers will reduce prices in order to sell more than their competitors.
When monopolistic competition is compared to perfect competition what can you generally expect with reguard to price output and profit?
We can expect that prices are higher, output is less, and profits are high er.
Price determination in perfect competition?
Price under perfect competition is determined by the forces of demand and supply of the industry. The price once fixed up by the industry is taken up by all the firms and the firm can sell any number of units at hat price.=The firm may earn normal profits, super normal profits in the short run whereas it earns normal profits in the long run.=
Is price determined by interaction of total demand and total supply in market under perfect competition?
Yes
Which type of market typically produces the highest level of output at the lowest price to consumers?
Perfect competition ... @DeeWillMafia
Distinguish perfect competition and imperfect competition?
In imperfect competition the producer is the price maker. Whereas in perfect the producer is the price taker meaning there are many producers and no one can influence the price.
A firm under a perfact competition is a price-taker not price-maker with examples?
it is a price taker because under perfect competition,price is determined by the market(through price mechanism:demand and supply) and not producer.this is because there are so many producers of the same product and all have the perfect knowledge of the market and there is only one buyer of that product,so no body can decide the price of the commodity on behalf of others.thats why a firm under perfect competition is a price taker and not a price maker. As part of the industry, the firm has to simply charge price determined by the industry. If the firm charges more price, it will lose sales and if it charges less price it will incur losses. The typical example of perfect competition is agriculture. The products are indistinguishable. There are many potential suppliers. This makes the farmer a price taker; if he or she prices the product higher than the market price, he or she will not make any sales or make fewer sales, thus incurring loss. Thus the farmer has to go with the price determined by the industry in order to survive
How price determined under perfect competition?
When various competitors compete on the various types of goods that they are selling, they will reduce the prices so that they sell more.
Why the demand curve faced by a perfectly competitive firm is horizontal?
The firm at perfect competition faces more than one competitor. All the firms are price taker and they take the market price as given. If one firm wants to sell its output at a pricehigher than the market price, it will sell nothing as buyers will go to the firm offering lower market price. If one firm wants to sell its output at a lower price, it will take the whole market demand for it. At the market price, determined by interactions between sellers, the firms will sell whatever output it wants. So, the firms determine the price and each firm determines its output. So the demand curve will be horizontal.
Explain in detail with suitable examples the imperfect competition and perfect competition?
In imperfect competition the producer is the price maker whereas in perfect the producer is the price taker. In imperfect no new competitors enter the industries hence super normal profits will continue to be realised, unlike in perfect comp
Explain in detail Price determination under perfect competition?
Price under perfect competition is determined by the forces of demand and supply of the industry. The price once fixed up by the industry is taken up by all the firms and the firm can sell any number of units at hat price.=The firm may earn normal profits, super normal profits in the short run whereas it earns normal profits in the long run.=
In what kind of market is the price demand the most elastic?
Perfect Competition
