Perfect Competition

In This Chapter

  • The perfectly competitive market: many consumers and producers are price takers
  • Free entry and exit into the market and the long-run supply curve
  • Consumers and producers have perfect information on price, utility, and production
  • Factor mobility, no transaction costs, and efficiency

The economic models that are used to describe how the consumer and producer achieve their goals assume that the market structure is one of perfect competition. Perfect competition is considered the most advantageous market condition in which to conduct business or, for the consumer, to buy his or her favorite products ...

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