ECON 103 Lecture Notes - Lecture 10: Longrun, Taipei Metro, Deutscher Motor Sport Bund
24 May 2017
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Lo1: what is perfect competition: perfect competition. 11/27/14 1:45:00 pm: many firms sell identical products to many buyers, there are no restrictions on entry into the market, established firms have no advantage over new ones, sellers and buyers are well informed about prices. How perfect competition arises: arises if the minimum efficient scale of a single product is small relative to the market demand for the good or services. In this situation there is room in the market for many firms: a firms minimum efficient scale. Is the smallest output at which long run average cost reaches its lowest level. In perfect competition each firm produces a good that has no unique characteristics, so consumers don"t care which good they buy. Price takers: price taker, firms in perfect competition are prices takers, a price taker is. A firm that cannot influence the market price because its production is an insignificant part of the total market.
