Chapter 14 Perfect Competition

Chapter 14 Perfect Competition - Chapter 14 Perfect...

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Chapter 14 Perfect Competition Competition is used in two ways o Rivalry among firms o Perfect competitive market structure Perfectly competitive market is a market in which economic forces operate unimpeded o Both buyers and sellers are price takers o The number of firms is large o There are no barriers to entry o Firms products are identical o There is complete information o Selling firms are profit maximizing entrepreneurial firms Price taker is a firm or individual who takes price by market supply and demand given Large # firms mean any firm’s output to market firm is minimal Barriers to entry are social political economic barriers that prevent firms from entering markets Firm’s products are identical Consumers know all there is to know about market – price products, and available tech etc. Firms can have many goals and be organized in variety of ways – for perfect competition firms must seek maximum profit and only profit. Supply is a schedule of quantities of goods that will be offered to market a various price
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Chapter 14 Perfect Competition - Chapter 14 Perfect...

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