lecture 2 Flashcards by William Ryan

Q

what are the assumptions of perfect competition

A

-atomistic - large number of buyers and sellers.
perfect knowledge
products are homogenous - identical products
-firms act independently (firms do not interact)
-firms are free to exit and leave at will
-firms can sell as much as they want
-no transport cost

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Q

what price will firms set using the assumptions of perfect competition

A

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