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![]() ![]() ![]() Perfect competition means that there are many sellers, there is easy entry and exiting of firms, products are identical from one seller to another, and sellers are price takers. Long-run equilibrium in a perfectly competitive industry occurs after all firms have entered and exited the industry and seller profits are driven to zero. A short-run production period is when firms are producing with some fixed inputs. In a perfectly competitive market there are thousands of sellers, easy entry, and identical products. If a perfectly competitive firm attempts to charge even a tiny amount more than the market price, it will be unable to make any sales. 8.1 Perfect Competition and Why It MattersĪ perfectly competitive firm is a price taker, which means that it must accept the equilibrium price at which it sells goods.
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