this is a technical term which is used for no firm and consumer can directly affect the market price.
Assumptions are:
large no's of buyers and sellers.
price taker price minimum
perfect information
homogeneous product
perfectly elastics
free entry or exits
no transportation cost.
Perfect competition to what. Please be specific.
No, Perfect Competition is just an imaginary one and it does not exist at all.
Perfect competition relates to existence of situation where demand for a product is equal to supply of product and there is equilibrium condition. The elasticity of demand and supply are coherent and the prices are not dependent upon the price variations. Customer are at free will. These are the advantages of perfect competition. Perfect competition is defined as a situation where there: Are many small buyers and sellers (firms) each too small to affect the price - the firms are "price-takers". Is a homogeneous product [all are identical]. Is free entry and exit. This means that firm can join or leave the industry - it is both allowed and costs nothing. Is perfect knowledge. If we take out "perfect knowledge" (which never exists in the real world) and leave the first three assumptions, we get "pure competition". It is less than perfect, but is still very competitive
Perfect Competition
Perfect competion lowers the cost of good and services by increasing the competition among firms.
IBM is a company, so it can't be a perfect competition. Only industries can be a perfect competition, or not.
Perfect competition to what. Please be specific.
No, Perfect Competition is just an imaginary one and it does not exist at all.
Perfect competition relates to existence of situation where demand for a product is equal to supply of product and there is equilibrium condition. The elasticity of demand and supply are coherent and the prices are not dependent upon the price variations. Customer are at free will. These are the advantages of perfect competition. Perfect competition is defined as a situation where there: Are many small buyers and sellers (firms) each too small to affect the price - the firms are "price-takers". Is a homogeneous product [all are identical]. Is free entry and exit. This means that firm can join or leave the industry - it is both allowed and costs nothing. Is perfect knowledge. If we take out "perfect knowledge" (which never exists in the real world) and leave the first three assumptions, we get "pure competition". It is less than perfect, but is still very competitive
Perfect Competition
Perfect competion lowers the cost of good and services by increasing the competition among firms.
Perfect Competition, Monopoly, Monopolistic Competition or Oligopoly
perfect competition
they maximize profit
Imperfect competition differs from perfect competition in several ways. In imperfect competition, there are fewer sellers, products may be differentiated, and firms have some control over prices. In contrast, perfect competition has many sellers offering identical products, with no control over prices.
The market concentration ratio for perfect competition is Low (Less than 40%).
Perfect Competition