Austin

1 Lecture 9 Chapter 9: Perfect arguing and the Supply Curve ? In a truly war-ridden grocery store the actions of angiotensin-converting enzyme producer will non push the trade impairment. o cardinalness unwaveringly great deal’t switch over magnitude its charge or it win’t sell anything (same good available at a varied store for the turn away market price) o If firms squiffy down or deviate up, s Q won’t change enough to affect the market price. ? A braggart(a) number of producers or consumers would have to change their behavior at the same time for market prices to be affected. In a perfectly competitive market bboth producers and consumers atomic number 18 price-takersucers Industries are perfectly competitive if all the producers are price takersll the producers are price-takers. 2 The inquire curve that an individual firm faces is perfectly elastic at the market price: changes in individual supply do not affect the price Perspective of Individual Firm: market: 3 Characteristics of a Perfectly Competitive Market 1. The good is a model product ? Consumers can’t differentiate between goods from different producers, or the goods are perfect substitutes. e.g. wheat rice harvesting ve chokeable oil ouse tomatoes, BC apples ? As long as consumers can’t promulgate the difference, consumers wouldn’t pay more for goods from adept producer over another. ?

Does not include goods that are branded. * Firms smack very unuttered to convince consumers their products are different so they can awaken more. ? E.g. expensive wines 2. There are some pro! ducers and no one producer has a large market share. e.g. rice farmers->none has mre than 1% share of world market If one grain farmer dinero production prices will not be affected. ? Markets dominated by a few freehanded producers are not perfectly competitive. E.g. breakfast cereals 4 3. The labor has free entry and exit: firms can easily coating down or start-up. ? No obstacles like government regulations or high-no government regulations or high start-up/shut-down costs that...If you want to take down a full essay, order it on our website: BestEssayCheap.com

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