Perfect Competition And Why It Matters (article)

Thursday, May 6, 2021

Perfect Competition And Why It Matters (article) | Khan

There is a variety of forces which at times tempt companies to sell their products below the cost of production. Every producer has to incur certain expenses like rent, interest, wages, etc, which have to be recovered whatever the level of sales. Besides this, the expenditure on material and labor varies with the volume of the product.Everyone sells at the "prevailing market price." It's just that the prevailing market price is different for each product or service — depending on the perceived value to buyers. Thus the prevailing market price for a Timex watch (on amazon today)...Neveready flashlights inc. needs $317,000 to take a cash discount of 3/15, net 70. a banker will loan the money for 55 days at an interest cost of $13,200.Each farmer willingly accepts the prevailing market price. They set their own price in the short run, but in the long run, the market sets the price. Each farmer willingly accepts the prevailing market price. 2 out of 2 poin 2 out of 2 poin Quality is perceptible and determines the market price.Reasonable price, territory, and customer restrictions on dealers are legal. Manufacturer-imposed requirements can benefit consumers by increasing competition among different brands (interbrand competition) even while reducing competition among dealers in the same brand (intrabrand competition).For instance, an agreement between a manufacturer and dealer to set maximum (or "ceiling") prices

Why are some producers forced to sell their products at

If a producer can produce either of two products, she's going to produce the one that fetches the higher price. The reverse is also true. If the price of a substitute in production falls, then the supply of the related product will increase. If the price of lamb nosedives, the outfit will devote fewer resources to sheep and more to cattle.Why are some producers forced to sell their products at the prevailing market price? a. price takers find market analysis is too costly b. they are very small players in the overall market c. high degree of similarity to competitor's products d. they can increase output without affecting quality 6.See also: excess supply. —that is to say, at the prevailing price, the quantity of raw cotton demanded exceeded the available supply. As a result, some sellers realized they could profit by raising the price. Eventually, cotton was sold at prices six times higher than before the war, keeping the lucky blockade-runners in business.Firms will engage in non-price competition, in spite of the additional costs involved, because it is usually more profitable than selling for a lower price and avoids the risk of a price war. For example, brand-name goods often sell more units than do their generic counterparts, despite usually being more expensive.

Why are some producers forced to sell their products at

Question 5 1 / 1 point Why are some producers forced to sell their products at the prevailing market price? a) they can increase output without affecting quality b) price takers find market analysis is too costly c) they are very small players in the overall market d) high degree of similarity to competitor's products Question 6 1 / 1 point In the _____, the perfectly competitive firm willBut over time, foreign growers swiped market share away from U.S. tobacco farmers, selling their crops to manufacturers at a lower price. When Congress voted in late 2004 to eliminate theFirms are said to be in perfect competition when the following conditions occur: (1) many firms produce identical products; (2) many buyers are available to buy the product, and many sellers are available to sell the product; (3) sellers and buyers have all relevant information to make rational decisions about the product being bought and sold; and (4) firms can enter and leave the marketA. pressure from competing firms will force acceptance of the prevailing market price. B. it must be a relatively small player compared to its competitors in the overall market. C. it can increase or decrease its output without affecting overall quantity supplied in the market.A. pressure from competing firms will force acceptance of the prevailing market price. B. it must be a relatively small player compared to its competitors in the overall market. C. it can increase or decrease its output without affecting overall quantity supplied in the market.

Why are some producers forced to sell their products at the prevailing market price?

a) Price takers to find market research is simply too pricey.

b) They can build up output with out affecting high quality.

c) High level of similarity to competition products.

d) They are very small gamers in the general market