Perfect competition
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Transcript of Perfect competition
![Page 1: Perfect competition](https://reader038.fdocuments.us/reader038/viewer/2022100606/559f6e741a28ab0c068b45fa/html5/thumbnails/1.jpg)
PERFECT COMPETITION
PRESENTED BY:
MADHU BALA
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CONTENTS
• INTRODUCTION
• MEANING OF PERFECT COMPETITION
• CHARACTERISTICS OF PERFECT COMPETITION
• TWO VITAL CONCLUSIONS
• DEMAND CURVE
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WHAT IS MARKET?
MARKET REFERS TO A MECHANISM OE AN ARRANGEMENT THAT FACILITATES THE SALE AND PURCHASE OF GOODS AND SERVICES.
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PERFECT COMPETITION
IT IS A TYPE OF MARKET WITH LARGE NUMBER OF
BUYERS AND SELLERS.
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CHARACTERISTICS OFPERFECT COMPETITION
LARE NUMBER OF FIRMS
LARGE NUMBER OF SELLERS
LARGE NUMBER OF BUYERS
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HOMOGENEOUS PRODUCT
PERECT KNOWLEDGE
FREE ENTRY AND EXIT OF FIRMS
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INDEPENDENT DECISION MAKING
PERFECT MOBILITY
NO EXTRA TRANSPORTATION COST
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TWO VITAL CONCLUSIONS
I. A FIRM UNDER PERFECT COMPETITION IS PRICE
TAKER, NOT PRICE MAKER
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II. DEMAND CURVE UNDER PERFECT COMPETITION IS
PERFECTLY ELASTIC.
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DEMAND CURVE
DEMAND CURVE IS PERFECTLY ELASTIC FOR A FIRM.
IT MEANS THAT:FIRM CAN SELL ANY COMMODITY AT
AT THE PREVAILING PRICE.
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