SUBMITTED BY :-DEEPAK14-MBA-06

PERFECT COMPETITION

PERFECT COMPETITION

Perfect competition describe a market in which there is

complete absence of direct competition among economic

groups.

Assumptions of perfect Competition

1. Large Number but small size of buyer and sellers.

2. Homogeneous products.3. Perfect knowledge.4. Free entry or exit of firms.5. Free from checks.6. Perfect mobility.7. Lack of transport cost.8. Lack of selling cost.

Price determination of perfect competition

Determination of Equilibrium price

Effect of Change in demand on price

Effect of change in supply on price

Normal price and the laws of returnsLaw of increasing returns or law of

decreasing costLaw of constant returns or law of constant

cost.Law of diminishing returns or law of

increasing cost

Law of increasing returns

Law of constant returns

Law of diminishing returns

ConclusionPerfect competition describes a market in

which there is complete absence of direct competition among economic groups.

For price determination under perfect competition there are some assumption like homogeneous product , free entry and exit of firms etc.

In perfect competition the equilibrium point is that where demand and supply intersect each other.

There is also effect of change in demand and supply on prices.