Austin

1
Lecture 9
Chapter 9: Perfect Competition and the Supply Curve
? In a truly competitive market the actions of angiotensin-converting enzyme producer will not affect the market price.
o oneness firm can’t increase its price or it win’t sell anything (same good available at a different store for the lower market price)
o If firms squiffy down or start 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 are 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 regulate product

? Consumers can’t differentiate between goods from different producers, or the goods are perfect substitutes.
e.g. wheat rice fruit ve chokeable oil ouse tomatoes, BC
apples
? As long as consumers can’t promulgate the difference, consumers wouldn’t pay more for goods from one producer over another.
?



Does not include goods that are branded.
* Firms try very unuttered to convince consumers their products are different so they can awaken more.
? E.g. expensive wines
2. There are many producers 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 big producers are not
perfectly competitive.
E.g. breakfast cereals
4
3. The perseverance has free entry and exit: firms can easily close 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 get a full essay, order it on our website: Orderessay



If you want to get a full essay, wisit our page: write my essay .