Download Perfect Competition Script

Perfect Competition Script
*Is a hypothetical market form where no producer or consumer has the
market power to influence prices.
Certain conditions must be met
*markets set the price
*goods and services are perfect substitutes because all firms sell an identical
product
*everyone has equal access to technology and resources
*any firm can enter or leave the market at any time
*individual buyers and sellers act independently
*all firms and consumers know all the prices set by the firm
 The best current example is the agriculture industry because there are
a variety of suppliers and almost perfect substitutable products.
 Ebay auctions are also considered perfect competition because anyone
can enter to but or sell things, everyone knows or can easily learn the
computer technology, and there are common products and many
potential buyers, also advertising that would benefit the industry as a
whole occurs.
*Perfect competition is an idealized market structure that is not observed in the real
world. While unrealistic, it does provide an excellent benchmark that can be used to
analyze real world market structures. In particular, perfect competition efficiently
allocates resources.
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Perfect competition a market structure characterized by a large number of
firms so small relative to the overall size of the market, such that no single
firm can affect the market price or quantity exchanged. If one firm decides to
double its output or stop producing entirely, the market is unaffected. The
price does not change and there is not discernible change in the quantity
exchanged in the market. Perfectly competitive firms are price takers. They
set a production level based on the price determined in the market. If the
market price changes, then the firm re-evaluates its production decision. This
means that the short-run marginal cost curve of the firm is its short-run
supply curve.
Within each industry the products and services of each firm must be virtually
indistinguishable from those of other firms; with no need to differentiate one's
offerings, ideally there should no promotion or advertising; if there is, it's a
waste.
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You don’t have a lot of avantage in a perfect competition because if you go out of
business there is a perfect substitute ready to take your place and if you raise
your prices than people would just shop elsewhere.
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In marketing, product differentiation (also known simply as
"differentiation") is the process of distinguishing the differences of a
product or offering from others, to make it more attractive to a particular
target market. This involves differentiating it from competitors' products
as well as one's own product offerings.This is a source of competitive
advantage which in this case would not work because the whole point
is not being able to distinguish between the products of the different
firms.
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Perfect competition is very rare but is used to evaluate other market structures
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Imperfect competition is a market that lacks one or more of the conditions, this
is what most of the firms and industries in the united states fall into.
In a pure competition, supply and demand set the equilibrium price. To maximize profit,
each firm selects a greater level of output. Finding the level of output that equated its
marginal cost with its marginal revenue.