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    Market Structure: Perfect Competition

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    LOMIBAO, JC HUBBER P.
    This document provides an overview of perfect competition as a market structure. It defines key terms like market and market structure. It then lists the main characteristics of a perfectly competitive market: there are many small buyers and sellers; the goods are homogeneous; resources can move freely between uses and locations; all agents have perfect information; and there are no barriers to entry or exit, so firms are price takers. The document serves to introduce students to the concept of perfect competition and its defining features.

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    Market Structure: Perfect Competition

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    LOMIBAO, JC HUBBER P.
    6 views9 pages
    This document provides an overview of perfect competition as a market structure. It defines key terms like market and market structure. It then lists the main characteristics of a perfectly competitive market: there are many small buyers and sellers; the goods are homogeneous; resources can move freely between uses and locations; all agents have perfect information; and there are no barriers to entry or exit, so firms are price takers. The document serves to introduce students to the concept of perfect competition and its defining features.

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    This document provides an overview of perfect competition as a market structure. It defines key terms like market and market structure. It then lists the main characteristics of a perfectly competitive market: there are many small buyers and sellers; the goods are homogeneous; resources can move freely between uses and locations; all agents have perfect information; and there are no barriers to entry or exit, so firms are price takers. The document serves to introduce students to the concept of perfect competition and its defining features.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    6 views9 pages

    Market Structure: Perfect Competition

    Uploaded by

    LOMIBAO, JC HUBBER P.
    This document provides an overview of perfect competition as a market structure. It defines key terms like market and market structure. It then lists the main characteristics of a perfectly competitive market: there are many small buyers and sellers; the goods are homogeneous; resources can move freely between uses and locations; all agents have perfect information; and there are no barriers to entry or exit, so firms are price takers. The document serves to introduce students to the concept of perfect competition and its defining features.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 9

    Module 13

    Market Structure:
    Perfect
    Competition
    Lesson
    We have learned that the interaction of sellers and buyers is one of the concerns in
    microeconomics. Hence, as a business student, you have to understand the behavior
    of these players in the market. We define “market” as a place where buyers and
    sellers can meet to facilitate the exchange or transaction of goods and services
    (Kenton, 2020). Market offers various products, however, not all products are
    available in a single market. The type of products available varies on the market
    structure. Market structure refers to the competitive environment in which buyers
    and sellers operate. The degree of competition, it is rivalry among various sellers in
    the market, differs from the characteristics of the market.
    Lesson
    It depends on the number and size of buyers and sellers, type of product bought and
    sold, degree of mobility of resources, entry and exit of firms, and pricing powers.

    This module will help you understand one of the market structures which is the
    perfect competition.
    Perfect or Pure Competition
    A perfectly competitive market is a hypothetical market where competition is at its
    greatest possible level. Many firms competing in the market, each of them is
    selling a product that is indistinguishable from other products.
    Characteristics of Perfect or Pure Competition
    ▧ There are so many buyers and sellers that each has a negligible impact on
    market price. The change in the output of a single firm will not noticeably
    affect the market price of the good. Likewise, there is no single buyer who can
    influence the price since the consumer purchases only a small amount or in
    retail.
    ▧ The products sold in the market are homogenous. It means that the products
    are highly similar in such a way consumers have no preference to buy from the
    other seller. The goods offered for sale are all the same. For example, the salt is
    the same rock salt that the other store sells. Most of the products sell in perfect
    competition are agricultural products.
    Characteristics of Perfect or Pure Competition
    ▧ Perfect mobility of resources refers to the easy transfer of resources in terms of
    use or terms of geographical mobility.
    ▧ There is perfect knowledge of economic agents of market conditions such as
    present and future prices, costs, and economic opportunities.
    ▧ The firms can easily enter or exit from the market because there are no
    significant barriers or special costs to discourage the new entrants. Likewise,
    there are no barriers that will prevent sellers from exiting the market. Hence,
    firms need less capital to enter in the market.
    Characteristics of Perfect or Pure Competition
    ▧ Market price and quantity of output are determined exclusively by forces of
    demand and supply. The seller is a price taker and has to follow the market
    price in selling the goods.
    YouTube Video Link:
    Thank you!

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