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SUBMITTED BY :-DEEPAK14-MBA-06
PERFECT COMPETITION
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PERFECT COMPETITION
Perfect competition describe a market in which there is
complete absence of direct competition among economic
groups.
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Assumptions of perfect Competition
1. Large Number but small size of buyer and sellers.
2. Homogeneous products.3. Perfect knowledge.4. Free entry or exit of firms.5. Free from checks.6. Perfect mobility.7. Lack of transport cost.8. Lack of selling cost.
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Price determination of perfect competition
Determination of Equilibrium price
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Effect of Change in demand on price
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Effect of change in supply on price
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Normal price and the laws of returnsLaw of increasing returns or law of
decreasing costLaw of constant returns or law of constant
cost.Law of diminishing returns or law of
increasing cost
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Law of increasing returns
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Law of constant returns
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Law of diminishing returns
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ConclusionPerfect competition describes a market in
which there is complete absence of direct competition among economic groups.
For price determination under perfect competition there are some assumption like homogeneous product , free entry and exit of firms etc.
In perfect competition the equilibrium point is that where demand and supply intersect each other.
There is also effect of change in demand and supply on prices.
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