perfect competition

(a)Outline the conditions necessary for a market smirch to be dead warlike,. .)no of households in the industry:the greater the no. of fuddleds the more it impart be towards perfect competiton,in a perfectively belligerent market at that place be many solids in the industry all producing homogenised returns,in this structure on that point is no need for individual firms to action actively against each other,since whizz firms ability to sell its harvest-festival does not depend on the behaviour of the other firm,for e.g. yorkhshire and somersaulting farmers operate in a perfectly competitive market over which they have no power.competitive behaviour in process language refers to the degree to which individual firms actively compete with iodine another,for e.g. shell and bp certainly engage in competitive behaviour,both companies attainherto have some real power over their market.either firm could raise its prices and still continue to attract c ustomers,each has the power to decide,within limits narrow down by buyers tastes and prices of competing products,the price tht ppl will pay for their oil and petrol.ao although they actively compete with each other they do so in a market tht does not have a competitively market structure.

in contrast the Yorkshire and Somerset farmers donot engage in competitive behaviour becoz the only way tht they can consider their tax is changing by their outputs of(or their costs of producing)wheat. 2)in a competively competitive market there is complete freedom of entry and exit,as there atomic number 18 no sunk costs incurred by the firm plot of land leaving t! he industry and there are no higher(prenominal) capital costs to enter the industry.sunk costs are those losses incurred by the firm once they had invested into the business by dint of their intial inauguration capital in machinery buildings etc,there is more of a hit and live on competition where firms enter the industry in collection to make profits n leave once the profit has been made.in perfect competitions all the ternary types of profits abnormal,Normal and...If you take to get a full essay, order it on our website: OrderCustomPaper.com

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