Ch.7 Guided Reading - Chapter 7 Guided Reading Section 1 Cause Buyers and sellers are not likely to work together to bargain for better prices Cause the

Ch.7 Guided Reading - Chapter 7 Guided Reading Section 1...

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Chapter 7 Guided Reading Section 1 Cause: Buyers and sellers are not likely to work together to bargain for better prices. Effect: The market determines price without influence from suppliers or consumers. Cause: the buyer will not pay extra for one particular company’s goods Effect: Identical products are key to perfect competition. Cause: Entrepreneurs are less likely to enter a market with high start up cause. Effect: markets that involve high start-up costs are less likely to be perfectly competitive markets. Cause: Sometimes firms cannot make enough to stay in business. Effect: Firm enters and leaves a perfectly competitive market Cause: Many sellers compete to offer their commodities to buyers. Effect: Prices are forced down to the point where they just cover the seller’s cost of doing business. Cause: no suppliers can influence prices in a perfectly competitive market. Effect: Producers adjust their output decisions based on their most efficient use of available land, labor, and capital. B. Reviewing Key Terms Briefly define or identify each of the following. 7. perfect competition A market structure in which a large number of firms all produce the same product. 8. commodity A product that is the same no matter who produces it,, such as petroleum notebook paper, or milk.

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