Save
Busy. Please wait.
Log in with Clever
or
show password
Forgot Password?
Don't have an account?  Sign up 
Sign up using Clever
or
Username is available taken
show password


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account. Your email address is only used to allow you to reset your password. See our Privacy Policy and Terms of Service.

Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
focusNode
Didn't know it?
click below
 
Knew it?
click below
Don't Know
Remaining cards (0)
Know
0:00
edit
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

Perfect Competition

Explain the concept of being a ‘price taker’ This means that the individual firm must accept the price as it is set on the market. Each firm supplies such a tiny fraction of the market it cannot influence the market price.
What are the characteristics of perfect competition No barriers to entry – Firms can enter and leave the industry as and when they chose. A large number of buyers and sellers – Cannot practice price discrimination. Each firm controls too little market share to be able to influence the market price.
Reason for the shape of the demand curve of an individual firm in perfect competition A firm in perfect competition is a price taker / it accepts the market price. If a firm increases price, quantity demanded will fall to zero as consumers switch to the cheaper identical goods available.
Impact which the entry of new firms would have on the market and on the equilibrium position of the firm Their entry cause the market supply curve to shift to the right. This drives down the market price from P1 to P2. Since each firm is a price taker , it must now charge P2.
Advantages of Perfect Competition Low prices The firm sells its products at the lowest possible prices. Efficient The firm produces at the lowest point of average costs so there is no waste of scarce resources.
Disadvantages of Perfect Competition
Created by: barryml
Popular Economics sets

 



Voices

Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!
"Know" box contains:
Time elapsed:
Retries:
restart all cards