Question

How did competitive conditions cause the personal computer market to expand?

Answer 1

with the evolving use of computers on daily basis, computer is no longer a luxury, but a necessity. in the ever emerging world of markets, the discovery of such a useful invention has spread out the huge market. now a days computer is found on every office desk in every home and in every super market. the high demand of such a user friendly and efficient machine has caused the market for computers to be competitive. some of the main features of a competitive market are listed below.

1. homegeneity of goods, since the computers available are same in every respect on all the shops, the market is uniform in respect of prices, people can buy a computer from anywhere. this has expanded the market to the core.

2. freedom of entry and exit in the market has given the producers chance to make money in a short run and exit. since the good is highly demanded, once a producer makes a new invention he will make huge profits,

3. innumerous buyers and sellers make the business easy and efficient. it gives a security to business and helps it expand.

4. In a perfect competitive market, both the buyers and the sellers have perfect knowledge about the conditions prevailing in the market. If there was no perfect knowledge about the market, some buyers would charge a relatively higher price. This would mean that the selling price will not be uniform for all firms. But because buyers have perfect knowledge about the market, a firm will fail if it attempts to sell at a price higher than the market price. thus this makes the market for computers easy to expand.

all these conditions make the market for computers spread with cometitive conditions