anonymous
  • anonymous
can you give an example about perfect competition?
OCW Scholar - Principles of Microeconomics
katieb
  • katieb
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anonymous
  • anonymous
No, perfect competition is merely a theoretical concept to date. It describes an economic system where a very large number of identical (or very nearly identical) firms produce a homogenous good - and thus each face a constant demand and a constant price that is set by the consumers. The closest to this would be something like farmers all selling potatoes - but even then the potatoes can be differentiated in terms of quality.
anonymous
  • anonymous
No, perfect competition is classical economic ideoly theory. for example invisible hand control market. the price is automatic supply and demand meet spot. conclution is competition be monopoly, olioly, etc. so another economist made new theory.
anonymous
  • anonymous
You need to think of products that are relatively easy to produce and hard to differentiate between producers. Things that come close to it would be say Döner Kebab shops in Berlin or say Pizza Slice Shops in NYC. There are lots of producers in both cases and only minor differences between the products. The price is pretty much set by the market as a whole. A new Pizza shop is forced to take the going rate on a slice (almost) as there is very high elasticity. and lots of alternatives. Neither of these quite work though as clearly there are some variances in quality and price.

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anonymous
  • anonymous
very good question u have asked..in reality very few examples can b cited but a market which is a good approximation of perfect competition is agriculture.............................

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