answersLogoWhite

0

Perfect competition is a theoretical market structure. It is primarily used as a benchmark against which other market structures are compared. The industry that best reflects perfect competition in real life is the agricultural industry.
WHAT IS A PERFECT COMPETITION?

solution - It is that form of market where are very large numbers of buyers and sellers and same product sold with fixed price.

Now I explain that How in perfect comp. very large numbers of buyers and sellers, fixed price and same product sold.....

A perfect competition is the competition of product sold means If buyer wants to sell a product (ex. maggie), so he is not a single seller that he sells that product (maggie), there are many sellers that sells the same product... so a perfect competition found If the product sells to huge numbers of customers means If customers like product so much .. so every seller wants to sell the same product(ie ex. maggie).So thats why in perfect competition a huge numbers of sellers and a huge numbers of customers.

Now i take example..

Imagine a market in which every seller has maggie product.. so if customer wants to buy a maggie.. he has many option to buy a maggie to that seller. If one seller wants to attract the customer by lowering the price ie 10 to 8, so he will bring losses in the firm because if he purchase the product in Rs8 so how he sell the product in that rate. And if he wishes to high the price, so you know customers has many option that i above explained.. so same price prevails in the market or in

other words a firm is price taker and industry is price maker.

User Avatar

Wiki User

9y ago

What else can I help you with?

Related Questions

Use examples to show the difference in the profit maximization goal of perfect competition and monopoly?

Shut


What is the difference between perfect competion and imperfect competion?

perfect competion is a situation where the are many suppliers in the field


Under what conditions might profit maximization not lead to stock price maximization?

Under what conditions might profit maximization not lead to stock price maximization?"


Are wealth maximization and profit maximization related?

Not necessarily


What are the examples of profit maximization and maximization of shareholders profit?

i can help u out. mail me on meghaverma18@yahoo.com


Advantages of profit maximization?

Profit maximization increase the graph of outputs.


Is profit maximization is good or bad for society?

Profit maximization can be both good or bad. Done correctly, profit maximization helps the company provide great products and services for customers.


Sales maximization vs profit maximization?

sales maximization technique is generally used in scale industries where base of the expenses is largelly fixed and where variable costs are limited. on the other hand profit maximization technique are used by variety of industries. total output is higher in sales maximization as compared to profit maximization


What is the difference between profit maximization and value maximization?

discount rate


Shareholder wealth maximization is considered to be a more appropriate goal for the firm than profit maximization because?

Shareholder wealth maximization is considered to be a more appropriate goal for the firm than profit maximization


What are the policies on profit and maximization in manegerial economics?

WHAT IS THE PROFIT MAXIMISATION?


Differentiate between value for money and profit maximization concept in corporate governance?

differentiate between value for money and profit maximization