Log in lorne.prupas 7 years agoPosted 7 years ago. Direct link to lorne.prupas's post “What is the answer to the...” What is the answer to the question: Can you name five examples of perfectly competitive markets? Why or why not. My understanding is that there is no such thing as a perfectly competitive market. We may get close to one, such as in the airline industry. But it is still not a perfectly competitive market. Therefore, we can't give five examples. Or, is the question asking for a "nearly" perfectly competitive market. What is being asked for here and am is my understanding correct? • (11 votes) Temistocles Valdes 7 years agoPosted 7 years ago. Direct link to Temistocles Valdes's post “I think mining cryptocurr...” I think mining cryptocurrency meets the criteria listed above in that: Many firms (miners) produce identical products (cryptocurrency). arguably this isn't the case for every cryptocurrency but it seems like the concept fits nicely. (13 votes) crystal 7 years agoPosted 7 years ago. Direct link to crystal's post “A single firm in a perfec...” A single firm in a perfectly competitive market is relatively small compared to the rest of the market. What does this mean? How small is small? In this question how can I explain the how small ? • (2 votes) Mateusz Jamrog 7 years agoPosted 7 years ago. Direct link to Mateusz Jamrog's post “A small firm is a firm no...” A small firm is a firm not big enought to make any change in the equilibrium price. (12 votes) nidhipipalia30 6 years agoPosted 6 years ago. Direct link to nidhipipalia30's post “Suppose, in a perfectly c...” Suppose, in a perfectly competitive market selling oranges, a seller sells at 4$ per kilo and another seller sells at 5.5$ per kilo. Now, a buyer who comes across these two sellers may think that the 5.5$ oranges are better in quality even though they're the same and may purchase the latter. By going through the fourth paragraph of the 'Perfect competition and why it matters', how can we relate to it and won't other factors like consumer psychology have a say in this? • (3 votes) melanie 6 years agoPosted 6 years ago. Direct link to melanie's post “If the quality of the goo...” If the quality of the good is different based on the supplier (or even if people think that is the case), then it is by definition not a perfectly competitive market. Perfect competition requires completely identical goods. The situation you describe would be a monopolistically competitive market where goods are slightly differentiated. (8 votes) asmita mundhe 5 years agoPosted 5 years ago. Direct link to asmita mundhe's post “explain how a perfectly c...” explain how a perfectly competitive firm can make economic (abnormal)profit only in the short run? • (1 vote) melanie 5 years agoPosted 5 years ago. Direct link to melanie's post “In the long run, other fi...” In the long run, other firms will enter the market seeking to make the same economic profit. This drives the price down until no firms have any incentive to enter because there are no economic profits. (4 votes) Kamogelo Sedibe 7 years agoPosted 7 years ago. Direct link to Kamogelo Sedibe's post “Is a private school perfe...” Is a private school perfectly competitive or monopoly? • (2 votes) Harsimran Singh Sekhon 7 years agoPosted 7 years ago. Direct link to Harsimran Singh Sekhon's post “Neither. A perfectly comp...” Neither. A perfectly competitive market would have no differentiation or their goods or services, which may be accurate if you were talking about a public school, and its definitely not a monopoly as there is not just one brand of private schooling, but more than one. To be honest, based on the detailed characteristics, I'd label it under a monopolistic competition(MC) or an oligopoly. If it were to be under an MC, the main criteria would be similar but differentiated goods or services, and privates schools differ from one another based on their name (their brand). However, in a not-so urban region where private schooling is not common, it may fall under an oligopoly, as it would be one of very few other organisations that provite private schooling services, possibly allowing it a decent amount of market power to be a price maker. (2 votes) Subham Das 7 years agoPosted 7 years ago. Direct link to Subham Das's post “Does manufacturing of cel...” Does manufacturing of cellphones come under perfect competition?? • (1 vote) Andrew M 7 years agoPosted 7 years ago. Direct link to Andrew M's post “There's no such thing as ...” There's no such thing as completely perfect competition in real life. You need to examine the industry and ask yourself what are the characteristics of perfectly competitive markets and how closely does the cellphone industry match those. (3 votes) Liam Mullany 6 years agoPosted 6 years ago. Direct link to Liam Mullany's post “Is it fair to say that in...” Is it fair to say that in a perfectly competitive market, the supply is very inelastic? Because even a slight price increase from one firm will lead to them losing all their business to the other firms. • (1 vote) melanie 6 years agoPosted 6 years ago. Direct link to melanie's post “No, it is actually the op...” No, it is actually the opposite: a firm's supply curve is perfectly elastic. Even a slight change in price loses ALL business. Perfectly inelastic would mean a change in price results in NO business lost. (2 votes) aspljai11 7 years agoPosted 7 years ago. Direct link to aspljai11's post “what is the meaning of 'm...” what is the meaning of 'market structure' here ? • (1 vote) NP 7 years agoPosted 7 years ago. Direct link to NP's post “Market structure defines ...” Market structure defines the various characteristics of a selected market or industry. (2 votes) Vivian 2 years agoPosted 2 years ago. Direct link to Vivian's post “How does a perfectly comp...” How does a perfectly competitive market appear mainly in products? • (1 vote) jon.bronson2890 4 years agoPosted 4 years ago. Direct link to jon.bronson2890's post “Does an inelastic demand ...” Does an inelastic demand curve cause farm prices to fluctuate more in response to supply changes than if the demand were elastic? • (1 vote)Want to join the conversation?
Many buyers are available to buy the product (cryptocurrency), and many sellers are available to sell the product (cryptocurrency).
Sellers and buyers have all relevant information to make rational decisions about the product (cryptocurrency) being bought and sold.
Firms (miners) can enter and leave the market without any restrictions—in other words, there is free entry and exit into and out of the market.
and i also didn't got the meaning of sentence 'the market structure is the conditions in an industry,' . please explain that.
FAQs
Why does perfect competition matter? ›
A perfectly competitive firm is known as a price taker because the pressure of competing firms forces them to accept the prevailing equilibrium price in the market. If a firm in a perfectly competitive market raises the price of its product by so much as a penny, it will lose all of its sales to competitors.
What are the 5 conditions of perfect competition? ›- Large numbers of buyers and sellers in the market.
- Free entry and exit of firms in the market.
- Each firm should be selling a homogeneous product.
- Buyers and sellers should possess complete knowledge of the market.
- No price control.
Lesson Summary
Perfect competition (also known as a perfect market) is a market condition where all suppliers compete on a level basis selling homogeneous goods. This condition occurs very rarely, and the factors that comprise it are homogeneous goods, knowledge availability, and profit maximization.
Perfect competition is a model of the market based on the assumption that a large number of firms produce identical goods consumed by a large number of buyers. The model of perfect competition also assumes that it is easy for new firms to enter the market and for existing ones to leave.
Why is perfect competition important in real life? ›The term perfect competition refers to a theoretical market structure. Although perfect competition rarely occurs in real-world markets, it provides a useful model for explaining how supply and demand affect prices and behavior in a market economy.
Who benefits from perfect competition? ›Productive efficiency in perfect competition means that firms produce goods at the lowest cost, eliminating waste and inefficiency. This results in lower prices, which benefit consumers, and allows firms to remain competitive. Resources are used efficiently, leading to a higher overall output of goods and services.
What are the 4 features of perfect competition? ›Fun Facts about the Key Features of Perfect Competition
There are no barriers to entry or exit. The firms cannot derive any monopoly power. The single firm is referred to as a price taker. There are no additional advertisement costs because the firms have perfect knowledge of the products they produce.
Consumers benefit more from perfect competition due to increased choices and lower prices. What is the failure of perfect competition? Perfect competition can fail to provide economies of scale, leading to higher production costs.
What are the 6 characteristics of perfect competition? ›- Perfect Competition. ...
- Features of Perfectly Competitive Market.
- 1) A large number of buyers and sellers. ...
- 2) Homogenous products. ...
- 3) Free exit and entry of firms. ...
- 4) Perfect knowledge among buyers and sellers. ...
- 5) No transport costs. ...
- 6) Perfect mobility of factors of production.
There are many barriers that prevent perfect competition from existing. For example, one of the criteria for a market to experience perfect competition is that all firms must sell an identical product. Theoretically, this should be easy to achieve. But in reality, most products have some degree of differentiation.
What is the major point to remember about perfect competition? ›
Since a perfectly competitive firm must accept the price for its output as determined by the product's market demand and supply, it cannot choose the price it charges. This is already determined in the profit equation, and so the perfectly competitive firm can sell any number of units at exactly the same price.
What are the reasons that make perfect competition difficult to achieve in an economy? ›Disadvantages of perfect competition include: 1. Lack of economies of scale, limiting the ability of firms to achieve cost savings through large-scale production . 2. Potential for market instability and frequent entry and exit of firms due to low barriers to entry .
What are the two barriers to entry in perfect competition? ›The most obvious barriers to entry are high startup costs and regulatory hurdles which include the need for new companies to obtain licenses or regulatory clearance before operation. Also, industries heavily regulated by the government are usually the most difficult to penetrate.
What is the summary of perfect competition? ›The three primary characteristics of perfect competition are (1) no company holds a substantial market share, (2) the industry output is standardized, and (3) there is freedom of entry and exit. The efficient market equilibrium in a perfect competition is where marginal revenue equals marginal cost.
What is perfect competition for dummies? ›Perfect competition: Perfect competition happens when numerous small firms compete against each other. Firms in a competitive industry produce the socially optimal output level at the minimum possible cost per unit.
How does perfect competition affect the economy? ›In the short run, the perfectly competitive firm will seek the quantity of output where profits are highest or, if profits are not possible, where losses are lowest. In the long run, positive economic profits will attract competition as other firms enter the market. Economic losses will cause firms to exit the market.
How does perfect competition affect society? ›How does perfect competition benefit society? It forces the price down to one that just covers the cost of production plus a small profit. This price is beneficial because it means that consumers are paying only for what has been put in to make products.
Why is perfect competition considered to be the most efficient market? ›Perfect competition is both allocatively efficient, because price equals marginal cost, and productive efficient, because firms produce at the lowest point on the average cost curve. It is also x-efficient because competition between firms will act as an incentive to increase efficiency.
Why does competition matter? ›Competition promotes innovation
To provide the best product or service available to consumers, companies bet on differentiation. They invest in design, improve production techniques, and are committed to worker training. And see innovation as a way to distinguish themselves in a competitive market.