Log in lorne.prupas 7 years agoPosted 7 years ago. Direct link to lorne.prupas's post “What is the answer to the...” What is the answer to the question: Can you name five examples of perfectly competitive markets? Why or why not. My understanding is that there is no such thing as a perfectly competitive market. We may get close to one, such as in the airline industry. But it is still not a perfectly competitive market. Therefore, we can't give five examples. Or, is the question asking for a "nearly" perfectly competitive market. What is being asked for here and am is my understanding correct? • (11 votes) Temistocles Valdes 6 years agoPosted 6 years ago. Direct link to Temistocles Valdes's post “I think mining cryptocurr...” I think mining cryptocurrency meets the criteria listed above in that: Many firms (miners) produce identical products (cryptocurrency). arguably this isn't the case for every cryptocurrency but it seems like the concept fits nicely. (13 votes) crystal 7 years agoPosted 7 years ago. Direct link to crystal's post “A single firm in a perfec...” A single firm in a perfectly competitive market is relatively small compared to the rest of the market. What does this mean? How small is small? In this question how can I explain the how small ? • (2 votes) Mateusz Jamrog 7 years agoPosted 7 years ago. Direct link to Mateusz Jamrog's post “A small firm is a firm no...” A small firm is a firm not big enought to make any change in the equilibrium price. (12 votes) nidhipipalia30 5 years agoPosted 5 years ago. Direct link to nidhipipalia30's post “Suppose, in a perfectly c...” Suppose, in a perfectly competitive market selling oranges, a seller sells at 4$ per kilo and another seller sells at 5.5$ per kilo. Now, a buyer who comes across these two sellers may think that the 5.5$ oranges are better in quality even though they're the same and may purchase the latter. By going through the fourth paragraph of the 'Perfect competition and why it matters', how can we relate to it and won't other factors like consumer psychology have a say in this? • (3 votes) melanie 5 years agoPosted 5 years ago. Direct link to melanie's post “If the quality of the goo...” If the quality of the good is different based on the supplier (or even if people think that is the case), then it is by definition not a perfectly competitive market. Perfect competition requires completely identical goods. The situation you describe would be a monopolistically competitive market where goods are slightly differentiated. (7 votes) asmita mundhe 5 years agoPosted 5 years ago. Direct link to asmita mundhe's post “explain how a perfectly c...” explain how a perfectly competitive firm can make economic (abnormal)profit only in the short run? • (1 vote) melanie 5 years agoPosted 5 years ago. Direct link to melanie's post “In the long run, other fi...” In the long run, other firms will enter the market seeking to make the same economic profit. This drives the price down until no firms have any incentive to enter because there are no economic profits. (4 votes) Kamogelo Sedibe 7 years agoPosted 7 years ago. Direct link to Kamogelo Sedibe's post “Is a private school perfe...” Is a private school perfectly competitive or monopoly? • (2 votes) Harsimran Singh Sekhon 7 years agoPosted 7 years ago. Direct link to Harsimran Singh Sekhon's post “Neither. A perfectly comp...” Neither. A perfectly competitive market would have no differentiation or their goods or services, which may be accurate if you were talking about a public school, and its definitely not a monopoly as there is not just one brand of private schooling, but more than one. To be honest, based on the detailed characteristics, I'd label it under a monopolistic competition(MC) or an oligopoly. If it were to be under an MC, the main criteria would be similar but differentiated goods or services, and privates schools differ from one another based on their name (their brand). However, in a not-so urban region where private schooling is not common, it may fall under an oligopoly, as it would be one of very few other organisations that provite private schooling services, possibly allowing it a decent amount of market power to be a price maker. (2 votes) Subham Das 6 years agoPosted 6 years ago. Direct link to Subham Das's post “Does manufacturing of cel...” Does manufacturing of cellphones come under perfect competition?? • (1 vote) Andrew M 6 years agoPosted 6 years ago. Direct link to Andrew M's post “There's no such thing as ...” There's no such thing as completely perfect competition in real life. You need to examine the industry and ask yourself what are the characteristics of perfectly competitive markets and how closely does the cellphone industry match those. (3 votes) Liam Mullany 6 years agoPosted 6 years ago. Direct link to Liam Mullany's post “Is it fair to say that in...” Is it fair to say that in a perfectly competitive market, the supply is very inelastic? Because even a slight price increase from one firm will lead to them losing all their business to the other firms. • (1 vote) melanie 6 years agoPosted 6 years ago. Direct link to melanie's post “No, it is actually the op...” No, it is actually the opposite: a firm's supply curve is perfectly elastic. Even a slight change in price loses ALL business. Perfectly inelastic would mean a change in price results in NO business lost. (2 votes) aspljai11 7 years agoPosted 7 years ago. Direct link to aspljai11's post “what is the meaning of 'm...” what is the meaning of 'market structure' here ? • (1 vote) NP 7 years agoPosted 7 years ago. Direct link to NP's post “Market structure defines ...” Market structure defines the various characteristics of a selected market or industry. (2 votes) Vivian 2 years agoPosted 2 years ago. Direct link to Vivian's post “How does a perfectly comp...” How does a perfectly competitive market appear mainly in products? • (1 vote) jon.bronson2890 4 years agoPosted 4 years ago. Direct link to jon.bronson2890's post “Does an inelastic demand ...” Does an inelastic demand curve cause farm prices to fluctuate more in response to supply changes than if the demand were elastic? • (1 vote)Want to join the conversation?
Many buyers are available to buy the product (cryptocurrency), and many sellers are available to sell the product (cryptocurrency).
Sellers and buyers have all relevant information to make rational decisions about the product (cryptocurrency) being bought and sold.
Firms (miners) can enter and leave the market without any restrictions—in other words, there is free entry and exit into and out of the market.
and i also didn't got the meaning of sentence 'the market structure is the conditions in an industry,' . please explain that.
FAQs
Why does perfect competition matter? ›
A perfectly competitive firm is known as a price taker because the pressure of competing firms forces them to accept the prevailing equilibrium price in the market. If a firm in a perfectly competitive market raises the price of its product by so much as a penny, it will lose all of its sales to competitors.
What is perfect competition in economics micro? ›In economic theory, perfect competition occurs when all companies sell identical products, market share does not influence price, companies are able to enter or exit without barriers, buyers have perfect or full information, and companies cannot determine prices.
What is the lesson of perfect competition? ›Lesson Summary
Perfect competition provides an equal level for all firms involved in the industry. Each firm has all of the knowledge pertaining to the goods, which prevents a monopoly, and each firm is free to enter and leave without any barriers.
Monopolistic competition refers to situations where there are many sellers, but the products are highly differentiated. There are several important nuances to explore between these types of markets. Created by Sal Khan.
How does perfect competition affect the economy? ›In the short run, the perfectly competitive firm will seek the quantity of output where profits are highest or, if profits are not possible, where losses are lowest. In the long run, positive economic profits will attract competition as other firms enter the market. Economic losses will cause firms to exit the market.
What are the pros and cons of perfect competition? ›The advantages of a perfectly competitive market include efficiency and lower prices, while the disadvantages include lack of innovation and potential for market failures.
What are 5 examples of perfect competition? ›- Foreign exchange markets. Here currency is all hom*ogeneous. ...
- Agricultural markets. In some cases, there are several farmers selling identical products to the market, and many buyers. ...
- Internet related industries.
There are many barriers that prevent perfect competition from existing. For example, one of the criteria for a market to experience perfect competition is that all firms must sell an identical product. Theoretically, this should be easy to achieve. But in reality, most products have some degree of differentiation.
What is an example of perfect competition in real life? ›Examples of Perfectly Competitive Markets: Agriculture
For example: Many farmers grow the same crops. Their products are largely interchangeable. There are millions of buyers who all understand the product being offered. The entry barriers for growing and selling crops are low.
Perfect competition can lead to lower quality products, lack of innovation, and potential instability for businesses. In a perfectly competitive market , all firms are price takers, meaning they have no control over the price of the goods or services they sell.
How do you succeed in perfect competition? ›
For a perfectly competitive market to be possible, there are a few conditions that companies can meet, which can include complete product information, zero cost of a transaction and an absence of long-term profits.
What is perfect competition one word answer? ›Perfect competition is a type of marketplace where multiple companies are selling the same product or service, and a large number of consumers are looking to purchase it.
Does perfect competition make profit in the long run? ›There are no economic profits in a perfectly competitive market in the long run because eventually, the drivers of profits cease to exist.
What is long run in perfect competition? ›Long-run equilibrium in perfect competition is the outcome in which the firms settle after the supernormal profits were competed away. The only profits that firms do make in the long run are normal profits.
Why is perfect competition better than monopoly? ›Explanation: The price in perfect competition is always lower than the price in the monopoly and any company will maximize its economic profit ( π ) when Marginal Revenue(MR) = Marginal Cost (MC). In perfect competition, price (P) = MR = Average Revenue (AR).
Why is perfect competition the most efficient? ›Perfect competition is considered to be perfect because both allocative and productive efficiency are met at the same time in a long-run equilibrium.
What are the benefits of perfect competition for consumers? ›it benefits consumers by keeping prices low and the quality and choice of goods and services high. Competition makes our economy work. By enforcing antitrust laws, the Federal trade Commission helps to ensure that our markets are open and free.
Why is perfect competition better than imperfect competition? ›Entry and Exit: Perfect competition allows free entry and exit of firms, while imperfect competition often has barriers to entry or exit. Market Power: Perfectly competitive firms have no market power and are price takers. In imperfect competition, firms have varying degrees of market power and can influence prices.
Who benefits more from perfect competition? ›In a perfectly competitive market, consumers tend to have the most benefits because there is perfect knowledge. As a result, all participants obtain knowledge evenly; hence there is no information breakdown. Furthermore, no monopolies are formed from perfect competition since the entry into the market is easy.