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When competition is limited to too few sellers, they can exert significant control over prices, often leading to higher prices for consumers. This lack of competition may result in price-fixing or collusion, as sellers may coordinate their pricing strategies to maximize profits rather than responding to market demand. Consequently, consumers have fewer choices and may face decreased product quality and innovation. Overall, the scarcity of competition can lead to market inefficiencies and reduced consumer welfare.
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What are the requirements for perfect competition?
Perfect knowledge of market - buyers' and sellers' sides Many buyers and sellers Sellers are passive price takers Free entry and exit for the industry Homogenous product
What is competition and how does it affect the market?
competition affects price quality and quantity in grocery store
Assumptions of perfect competition?
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.
Explain Why sellers in monopolistic competition have more control over price than sellers in perfect competition?
Sellers in monopolistic competition have more control over price than those in perfect competition because they offer differentiated products that are not perfect substitutes. This product differentiation allows firms to create brand loyalty and set prices above marginal cost, unlike in perfect competition where products are homogeneous, and firms are price takers. Additionally, the presence of some degree of market power enables monopolistically competitive firms to influence their pricing strategies based on consumer preferences.
What are pure competition companies?
Pure competition companies are companies have no control of the price of their product. Their product is standardized throughout all of the companies selling it. There are large numbers of both buyers and sellers of the product.
What term refers to independent firms that agree to eliminate price competition among themselves?
Price fixing is when companies conspire to eliminate price competition among themselves.
What are the requirements for competition?
Perfect knowledge of market - buyers' and sellers' sides Many buyers and sellers Sellers are passive price takers Free entry and exit for the industry Homogenous product
What are the requirements for perfect competition?
Perfect knowledge of market - buyers' and sellers' sides Many buyers and sellers Sellers are passive price takers Free entry and exit for the industry Homogenous product
What is competition and how does it affect the market?
competition affects price quality and quantity in grocery store
Assumptions of perfect competition?
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.
Explain Why sellers in monopolistic competition have more control over price than sellers in perfect competition?
Sellers in monopolistic competition have more control over price than those in perfect competition because they offer differentiated products that are not perfect substitutes. This product differentiation allows firms to create brand loyalty and set prices above marginal cost, unlike in perfect competition where products are homogeneous, and firms are price takers. Additionally, the presence of some degree of market power enables monopolistically competitive firms to influence their pricing strategies based on consumer preferences.
What is likely effect of competition among Internet service providers on the price of services?
The price of services will decrease.
What are pure competition companies?
Pure competition companies are companies have no control of the price of their product. Their product is standardized throughout all of the companies selling it. There are large numbers of both buyers and sellers of the product.
When a shortage exists in a market sellers?
When a shortage exists in a market, sellers find that the quantity demanded by consumers exceeds the quantity supplied at the current price. This situation often leads to upward pressure on prices, as sellers can increase prices to balance supply and demand. Additionally, sellers may prioritize their products or improve their offerings to attract buyers, potentially leading to increased competition among them. Ultimately, the market seeks to reach equilibrium where supply meets demand.
The ability to sell an asset quickly at a fair price is associated with?
An orderly market with sufficient liquidity where numerous buyers and sellers can agree on a fair price. You will notice the words "liquidity" and that the plural is used for buyers and sellers. There has to be money available to close a sale and some competition between buyers and sellers to make the transaction somewhat "fair".
Most accurately explains the effect of competition among local gas stations on the price of gasoline?
The price of gasoline will decrease
Which statement most accurately explains competition among local gas stations on the price of gasoline?
the price of gasoline will decrease
