In this article we will discuss about the welfare implications of a perfectly competitive market. Favourable Features of a Perfectly Competitive Price System: Such a perfectly competition system yields certain beneficial consequences in long-run equilibrium. They are listed below: 1. Consumer preferences as reflected in the market-place would be fulfilled. Here P=MC=MU. So, both consumers and producers are satisfied. 2. [...]
The following points highlight the top seven characteristics of a perfectly competitive market. The characteristics are: 1. Large Number of Buyers and Sellers 2. Homogeneous Product 3. Perfect Knowledge about the Market 4. Free Entry and Free Exit 5. Mobility of the Factors 6. Production Cost is the Only Cost 7. Horizontal Shape of the Firm's Average and Marginal Revenue [...]
In this article we will discuss about the process of price determination in a perfectly competitive market. In a perfectly competitive market, the number of buyers and sellers is large. The buyers and sellers are in competition to buy and sell a homogeneous product. The number of buyers and sellers in such a market is so large that each of [...]