Perfect Competition

Descrição

A-Levels Economics Mapa Mental sobre Perfect Competition, criado por cdsmith123 em 25-05-2013.
cdsmith123
Mapa Mental por cdsmith123, atualizado more than 1 year ago
cdsmith123
Criado por cdsmith123 mais de 11 anos atrás
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Resumo de Recurso

Perfect Competition
  1. ASSUMPTIONS
    1. LARGE NUMBER OF BUYERS+SELLERS - NO INDIVIDUAL CAN ALTER THE MARKET PRICE
      1. PERFECT INFORMATION OF ALL PRODUCTS
        1. EQUAL ACCESS TO TECHNOLOGY
          1. HOMOGENEOUS PRODUCTS
            1. NO BARRIERS TO ENTRY OR EXIT
              1. PERFECTLY MOBILE FACTORS OF PRODUCTION
              2. LONG RUN = profits cannot be made
                1. firm would be competed away
                  1. produce at market clearing price
                    1. ATC=MC
                2. SHORT RUN = If ATC is below market clearing price
                  1. Abnormal profits made
                    1. signals to other firms to enter market
                      1. supply increase = price set below market clearing = ATC=MC
                  2. LONG RUN = firms statically efficient
                    1. both productively + allocatively efficient at the same time
                      1. Firms being making losses
                        1. supply reduces
                          1. price increases

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