ECO200Y1 Lecture Notes - Lecture 10: Perfect Competition, Demand Curve, Average Variable Cost

• School: UTSG
• Department: Economics
• Course: ECO200Y1
• Professor: John Mcneill

Document Summary

It is in this context that the existence of the "perfect competition" phenomenon is considered, Where we find a limit situation in which no company or any consumer has the sufficient power to influence the market price. Producing firms, together with consumer individuals, are responsible for determining in the market environment the quantity and price to be followed by all firms in the economic sector. In a natural flow of supply and demand amid the relationship between the participants. For it to take shape, perfect competition requires certain conditions, such as: An environment where a large number of companies produce exactly the same product or service, using similar costs and means of production; Existence of a large number of consumers, all having the same information on conditions, prices and offers existing in the market; Similarity between the products offered on the market; No barriers to entry or exit for companies in the market in question;