10-1ab - PerfectCompetitionShortRun...

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Perfect Competition Short Run Perfect Competition Short Run Chapter 10-1
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A Perfectly Competitive Market A Perfectly Competitive Market perfectly competitive market  is one in  which economic forces operate unimpeded.
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A Perfectly Competitive Market A Perfectly Competitive Market A perfectly competitive market must meet  the following requirements: Both buyers and sellers are price takers. The number of firms is large. There are no barriers to entry. The firms’ products are identical. There is complete information.
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Perfect Competition Perfect Competition Perfect competition is a firm behavior that occurs when  many firms produce identical products and entry is easy.  Characteristics of perfect competition :   There are many sellers. The products sold by the firms in the industry are  identical.   Entry into and exit from the market are easy , and  there are many potential entrants. Buyers (consumers) and sellers (firms) have perfect  information.
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A Perfectly Competitive Market A Perfectly Competitive Market For a market to be perfectly competitive,  six  conditions must be met: 1. Both buyers and sellers are price takers – a price taker is a firm or individual who takes the price determined by market supply and demand as given 2. The number of firms is large – any one firm’s output compared to the market output is imperceptible and what one firm does has no influence on other firms A perfectly competitive market is a market in which economic forces operate unimpeded 14-5 From Colander text
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This note was uploaded on 01/13/2012 for the course ECON 102 taught by Professor Mikejavanmard during the Fall '10 term at Harvard.

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10-1ab - PerfectCompetitionShortRun...

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