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What is one reason that that individual producers in a perfectly competitive market have no influence over price?
Wiki User
∙ 9y ago
One reason that individual producers in a perfectly competitive market have no influence over prices is because they produce a small amount of a product in comparison to the total supply of the product. Perfect competition is sometimes referred to as pure competition.
Wiki User
∙ 9y ago
Wiki User
∙ 9y agosomeone awnsr this sheet
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What are the characteristics of a perfectly competitive market and a monopoly market?
characteristics of perfectly competitive market includes 1.Homogeneous products i.e identical in shape,size,taste,color,e.t.c 2.perfect knowledge to both consumers and producers 3.no transport costs incurred 4.perfect mobility of factors of production 5.common prices for identical goods in the market. 6.
What best explains why the free-market system follows a circular flow model?
consumers and producers influence each other in a circular fashion
Because the choices of consumers influence producers and the choices of producers also influence consumers the free-market system has which of the following?
A circular flow of influences
Why producers are price takers and not price makers?
Producers are not strictly price-takers. Generally, the more competitive a market is, the less pricing power a firm has, and the more of a price-taker it is than a price-maker. Since basic economic analysis usually focuses on a perfectly competitive market, a producer is a price-taker because it cannot change its price from the equilibrium condition Price = Marginal Cost = Marginal Revenue because it will be undersold by its competitors if it raises it price.
What is meant by the term a competitive market?
there are many producers selling the same products at similar prices.
What are the characteristics of a perfectly competitive market and a monopoly market?
characteristics of perfectly competitive market includes 1.Homogeneous products i.e identical in shape,size,taste,color,e.t.c 2.perfect knowledge to both consumers and producers 3.no transport costs incurred 4.perfect mobility of factors of production 5.common prices for identical goods in the market. 6.
What best explains why the free-market system follows a circular flow model?
consumers and producers influence each other in a circular fashion
Because the choices of consumers influence producers and the choices of producers also influence consumers the free-market system has which of the following?
A circular flow of influences
What is the struggle amoung various producers for the consumer's business called?
a competitive market
Why producers are price takers and not price makers?
Producers are not strictly price-takers. Generally, the more competitive a market is, the less pricing power a firm has, and the more of a price-taker it is than a price-maker. Since basic economic analysis usually focuses on a perfectly competitive market, a producer is a price-taker because it cannot change its price from the equilibrium condition Price = Marginal Cost = Marginal Revenue because it will be undersold by its competitors if it raises it price.
What is something consumers do to influence producers?
Is by demanding the product
How does the amount of rainfall influence the plants in an ecosystem?
that will be the producers
What explains how consumers purchases influence the decisions of producers?
Producers can figure out what consumers are willing to pay based on what they buy.
What is meant by the term a competitive market?
there are many producers selling the same products at similar prices.
What is it called when the quantity demanded equals the quantity supplied by producers?
this is called equilibrium or competitive equilibrium.
In a perfect market when an individual producer tries to raise their price they will not be able to sell there product?
An individual producer will try to raise the price of a product when there is great demand for the product in relation to supply in order to gain a profit. Other producers in a perfectly competitive market will then lower their prices in order to attract more consumers to their product. This may still produce a profit if enough consumers buy greater quantities of the product to compensate for the low price. Overall this increases demand for the supply.
What best explains how consumers purchase influence the decisions of producers?
Producers can figure out what consumers are willing to pay based on what they buy.
