All consumers and producers face the same price alternatively, information about prices is freely available so that buyers and sellers are price takers. A firm’s only goal is to maximize its profits in other words, firms have no interests (political, social, etc.) other than their economical interest.Į. Buyers could easily substitute another product if there were shortages.ĭ. There are many other firms with products that are available and practically indistinguishable from the goods of interest. Barriers can be legal, such as in patents and regulations technological, such as with technologies that are too costly or available only to certain industries or social, such as when loans or grants are available to only certain groups of people and not others.Ĭ. There are no barriers to the entry of new competitions and competitors. The output of the goods from each firm is small compared to the total supply of those goods so none of them are able to influence the price of the goods on their own.ī. For a market to be perfect, the following conditions must exist:Ī. A perfect or efficient market is a competitive market in which economic forces operate unimpeded.
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