Write short note on 'Price determination under perfect competition'.
i)Perfect competition is a market where there are a large number of buyers and sellers dealing
in homogeneous products.
ii) Under this, individual buyers and sellers cannot influence the market price by increasing or
decreasing their purchases or output, respectively.
iii)The market price of products
in perfect competition is determined by the industry as a whole.
iv)This implies that in perfect
competition, the market price of products is determined by taking into account
two market forces, that is, demand and supply.
v) In perfect competition, the
price of a product is determined at a point at which the demand and supply
curve intersect each other. This point is known as equilibrium point as well as
the price is known as equilibrium price.
i)Perfect competition is a market where there are a large number of buyers and sellers dealing in homogeneous products.
ii) Under this, individual buyers and sellers cannot influence the market price by increasing or decreasing their purchases or output, respectively.
iii)The market price of products in perfect competition is determined by the industry as a whole.
iv)This implies that in perfect competition, the market price of products is determined by taking into account two market forces, that is, demand and supply.
v) In perfect competition, the price of a product is determined at a point at which the demand and supply curve intersect each other. This point is known as equilibrium point as well as the price is known as equilibrium price.
