What is the level of competition faced by firms in each market?

Solutions

Expert Solution

A market is said to be perfectly competitive if each firm under it is a price taker.
A firm is a price taker if it cannot alter the market price.
No firms can raise or lower the market price if there are enough sellers.
A firm cannot sell anything if it raises its price more than its competitors.
In each market, firms cannot raise their prices simply because consumers know the prices of all firms.
In the markets,a perfectly competitive firm faces a demand curve.
As number of firms increases in market,a perfectly competitive market is approached.
In a perfectly competitive market, demand curve of a single firm gets flattered
There are many market structures in which firm can compete with each other.
The type of structure influence the firm's behavior.
A market might also have an uncompetitive structure with only small number of firms competing.
But the behavior of firms might be highly competitive in the same market.

Rahul Sunny answered 1 year ago

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