![]() ![]() If a firm tries to raise its price consumers would buy from a competitor with a lower price instead. Their own production levels do not change the supply curve. All producers contribute insignificantly to the market.Nevertheless, it is used because it provides important insights.Ī perfectly competitive market has several important characteristics: However, in practice, very few industries can be described as perfectly competitive. Because of this it serves as a natural benchmark against which to contrast other market structures. Perfect competition leads to the Pareto-efficient allocation of economic resources. Agriculture comes close to being perfectly competitive. Perfect competition: An industry structure in which there are many firms, none large enough to influence the industry, producing homogeneous products. ![]() Each firm is large enough to influence the industry.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |