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Title: Perfect Competition- Business/ Econmics notes
Description: Summary of perfect competition and it's characterisics
Description: Summary of perfect competition and it's characterisics
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Perfect competition= illustrates an extreme form of capitalism, in it firms are completely subject to market
forces
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The price they face is that determined
by the interaction of demand and supply in the whole market
...
e
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Applies
in long run as setting up a business takes time
-homogenous product-> no branding or advertising
-price taker
-horizontal demand curve=> price determined by interaction of demand and supply due to there being many
firms producing smaller amounts of output which don’t affect the market significantly
-examples include cabbages and carrots i
...
agriculture
...
Agriculture is closest to being perfect
competition
...
Price; firms cannot charge above horizontal demand curve or it faces losing profit
...
Output; MR=MC is profit maximisation
Title: Perfect Competition- Business/ Econmics notes
Description: Summary of perfect competition and it's characterisics
Description: Summary of perfect competition and it's characterisics