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  • Why Is the Demand Curve of a Firm in Perfect Competition Perfectly Elastic?

     

    Eseja2 Ekonomika

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Identifikators:716593
 
Vērtējums:
Publicēts: 15.01.2004.
Valoda: Angļu
Līmenis: Vidusskolas
Literatūras saraksts: Nav
Atsauces: Nav
Darba fragmentsAizvērt

Theoretically speaking four different market structures exists in today's world. Monopoly, oligopoly, imperfect competition and perfect competition are those four market structures. Monopoly and perfect competition are the two extreme cases, in monopoly the market is governed by one seller, and under perfect competition there are so many sellers that none of them has any power to control the market. As these two market structures are so extreme in nature, examples of these markets are very difficult to find in the every day world. Oligopoly and imperfect competition are the two common market structures and examples for them are easy to find in the real world. Oligopoly market structures usually consists of a very few firms in a given market and thus these firms enjoy quite a strong control over the market; example of an oligopoly would be OPEC.
The perfectly competitive model relies on five basic assumptions. These assumptions stay the same regardless the fact whether the market under consideration is a product market or a factor market.

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