A perfectly competitive market is one in which there are many suppliers and consumers, and each party has an equal opportunity to sell or buy goods or services. This is a theoretical market in which supply and demand are in equilibrium.
In a real-world situation, markets can be imperfectly competitive, which means that there may be some suppliers who have an advantage over others. For example, a monopolist can charge higher prices than other suppliers, and a monopoly can have a limited number of buyers. In these situations, competition may not be perfect, and it may not be possible to achieve equilibrium.
However, even in imperfect markets, buyers and sellers will generally find each other and reach an agreement that is conducive to both parties. This is because buyers want to purchase goods at the cheapest possible price, and sellers want to receive the highest possible price for their goods. It is important to note that markets can be either competitive or non-competitive, but they cannot be both.
Monopolistically competitive firms are not considered to be perfectly efficient in the long run. This is because they have some degree of market power due to product differentiation, which can lead to higher prices and lower output compared to perfectly competitive markets.
In a perfectly competitive market, there are many buyers and sellers, products are identical, and there is easy entry and exit. Prices are determined by supply and demand. In a non-perfectly competitive market, there may be barriers to entry, products are differentiated, and firms have some control over prices.
A local farmers' market, a flea market, stock markets
In perfectly competitive markets, economic profits are zero in the long run because firms are able to enter and exit the market. If firms in a perfectly competitive market are profitable, there would be an incentive for new firms to enter. Supply would increase, causing an increase in quantity and the price to be driven back down to equilibrium: NO PROFIT! If firms in a perfectly competitive market are suffering a loss, some firms would choose to exit the market. Supply would decrease, causing a decrease in quantity and the price to be driven back up to equilibrium: NO PROFIT!
Sears is a competitive store in many markets. They have combined with Kmart in order to better serve customers in some smaller areas as well.
Monopolistically competitive firms are not considered to be perfectly efficient in the long run. This is because they have some degree of market power due to product differentiation, which can lead to higher prices and lower output compared to perfectly competitive markets.
In a perfectly competitive market, there are many buyers and sellers, products are identical, and there is easy entry and exit. Prices are determined by supply and demand. In a non-perfectly competitive market, there may be barriers to entry, products are differentiated, and firms have some control over prices.
A local farmers' market, a flea market, stock markets
A local farmers' market, a flea market, stock markets
an alligator and fish
In perfectly competitive markets, economic profits are zero in the long run because firms are able to enter and exit the market. If firms in a perfectly competitive market are profitable, there would be an incentive for new firms to enter. Supply would increase, causing an increase in quantity and the price to be driven back down to equilibrium: NO PROFIT! If firms in a perfectly competitive market are suffering a loss, some firms would choose to exit the market. Supply would decrease, causing a decrease in quantity and the price to be driven back up to equilibrium: NO PROFIT!
Sears is a competitive store in many markets. They have combined with Kmart in order to better serve customers in some smaller areas as well.
This statement implies a firm must maintain proficiency in order to subsist in a perfectly competitive market. In perfectly competitive marketplace all prices are established by through supply/demand. Some firms may be a little on the lucky side while others may just be good. I will take luck any day however, at some point luck runs out and you better have learned something from your luck and apply it to being good. A firm in a competitive market must be efficient and find methods of production which yield the correct number of outputs and maintain fixed and variable cost of production at marginal levels.
Some examples of markets that exhibit characteristics of monopolistic competition include the fast food industry, the clothing industry, and the personal care products industry. In these markets, firms offer differentiated products to attract customers, and there are many competitors vying for market share.
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One can find information about money banking and financial markets at a variety of online websites. Some examples are: "Highered McGraw Hill", "Saylor", and a few others.
The continuum of faith in free markets:Marxist-no faithKeynesian-some faithChicago School-great faithAustrian School-complete faith(I am "post-Chicago," so perhaps "good faith" or an original Smithian, Classical School. Our goal should be competitive markets not free markets.)visit http://sorenlaw.blogspot.com/