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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.
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 are four conditions of monopolistic competition?
These are the requirements for perfect competition: 1) Many buyers, so that no buyer can by himself influence prices or production. 2) Many sellers, so that no seller can influence the price by himself, but instead must offer a price that is competitive with those of his rival sellers. Sellers are "price takers," as opposed to "price makers." 3) Homogenous goods, so that there are no competing alternatives to a good because they're all pretty much the same (e.g. nails). No matter whether you buy from Seller A or Seller B, you'll get the exact same thing. 4) Both buyers and sellers have perfect information about the market, so errors in judgment or mere rumors won't influence the behavior of buyers and/or sellers. 5) Low barriers to entry and exit: anyone can get into the business of selling a profitable good (or leave the business when the product is no longer profitable). So when one seller offers a new product that everyone wants to buy, under pefect competition, anyone else can get into the business of selling that product too. Suddenly the first seller will find he has a lot of competition in selling it. But "many sellers" is in keeping with perfect competition. 6) Sellers aim to maximize profits: Sellers will keep selling to all the buyers out there as long as they can cover their marginal costs of producing the product they sell.
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.
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.
What most accurately explains the effect of competition among local gas stations on the price of gasoline?
The price of gasoline will decrease
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
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".
What statement most accurately explains the effect of competition among local gas stations on the price of gasoline?
The price of gasoline will decrease.
