Perfect competition, Managerial Economics

Assignment Help:

Perfect Competition

 The model of perfect competition describes a market situation in which there are:

i.         Many buyers and sellers to the extent that the supply of one firm makes a very insignificant contribution on the total supply.  Both the sellers and buyers take the price as given.   This implies that a firm in a perfectly competitive market can sell any quantity at the market price of its product and so faces a perfectly price elastic demand curve.

ii.         The product sold is homogenous so that a consumer is indifferent as to whom to buy from.

iii.         There is free entry into the industry and exit out of the industry.

iv.         Each firm aims at maximising profit.

v.         There is free mobility of resources i.e.   perfect market for the resources.

vi.         There is perfect knowledge about the market.

vii.         There is no government regulation and only the invisible hand of the price allocates the resources.


Related Discussions:- Perfect competition

Determine the concepts of demand, Determine the concepts of demand ...

Determine the concepts of demand Demand always mentions to demand at price. The term 'demand' has no meaning unless it is related to price. For example, the statement, 'the

Law of demand, explain the law of demand. briefly discuss the exception to ...

explain the law of demand. briefly discuss the exception to the law of demand

Help, BU 5210 Final ...

BU 5210 Final Summer 2013 Economic Analysis

Factors influencing demand for a product, Factors influencing demand for a ...

Factors influencing demand for a product These are broadly divided into factors determining household demand and factors affecting market demand . Factors affecting hou

Supply of money, The supply of money Refers to the total amount of mon...

The supply of money Refers to the total amount of money in the economy. Most countries of the world have two measures of the money stock - broad money supply and narro

Direct control and moral suasion, Direct control and Moral Suasion Wit...

Direct control and Moral Suasion Without actually using the above weapons, the central bank can attempt simply to use "moral suasion" to persuade the commercial banks to restr

Ans, State the difficulties in the measurement of profit.

State the difficulties in the measurement of profit.

Determine the law of demand curve, Determine the law of Demand Curve Th...

Determine the law of Demand Curve The law of demand can also be presented through a curve known as demand curve. Demand curve is a locus of points showing numerous alterative p

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd