![]() Their quality and characteristics don’t vary from one another. Homogeneous products: the products being sold in this market are perfect substitutes for one another.No single seller or producer is large enough to influence the market price. ![]() There exist a very large number of sellers willing to supply their products at given market prices.There exist a very large number of buyers.A good example is agriculture, where all rice farmers sell homogeneous products to consumers. Perfect competition refers to a market that has many buyers and sellers, many similar products, and many substitutes. Producers and consumers have no perfect information.Producers have some control over prices.Consumers assume that there are non-price differences among the products of competitors.There is not one firm that has total control over the price of the market.There are many producers and consumers in the market.Characteristics of Monopolistic Competition Consumers, nevertheless, usually have a preference between the two chains. Another example would be the fast-food industry, where a burger made by McDonald’s is quite similar to a burger made by Burger King from an economic standpoint. An example of this can be clothing, where marketing and branding are the main marks of distinction among different but apparently similar black shirts. This means that the goods are not perfect substitutes for one another, but they are close substitutes. The difference lies in branding or, in most cases, quality. This is an imperfect competition in which several producers sell products that are different from one another. There is a relatively small number of firms supplying the market.Firms make abnormal profits in the long-run.Profit maximization is a condition in this market.Only a few firms operate in the market. ![]() Good examples include industries such as oil & gas, airline, and automakers. Under oligopolies, there also exist some entry barriers with which other enterprises have to contend.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |