Lecture 25 - 25 Perfect Competition 1 Session Outline...

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1 25 : Perfect Competition
Prof. Trupti Mishra, School of Management, IIT Bombay Session Outline Features of Perfect Competition Demand and Revenue of a firm Short run Equilibrium Market supply and firm’s supply analysis
Prof. Trupti Mishra, School of Management, IIT Bombay Perfect competition market is a most basic form of market structure. It is theoretical and hypothetical, but the most ideal form of market The term perfect competition refers to set of conditions prevailing in the market.
Prof. Trupti Mishra, School of Management, IIT Bombay Perfect competition is a market structure chactarised by a complete absence of rivalry among the individual firms. In economic theory it has a meaning diametrically opposite to the everyday use of this term. In practice, businessmen use the word competition as synomyous to rivalry. In theory, perfect competition implies no rivalry among firms.
5 Perfect Competition - Characteristics A large number of buyers and sellers in the market. Homogeneous Product Perfect Mobility of Factor of Production Free entry and Free Exit of Firms Prof. Trupti Mishra, School of Management, IIT Bombay
6 Perfect Competition - Characteristics Perfect Knowledge Absence of Collusion and artificial restraint No Government intervention Prof. Trupti Mishra, School of Management, IIT Bombay
7 Perfect Competition Perfect competition is an uncommon phenomenon in real business world . However the actual market that approximate to the conditions of perfect competitive models include share markets, securities and bond markets and local vegetable market and agricultural product market etc. Prof. Trupti Mishra, School of Management, IIT Bombay
8 Perfect Competition Although the form of market is an uncommon phenomena,

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