which one of the following is not a basic assumption of the model of perfect competition?
533028
['Large Number of Buyers and Sellers: ADVERTISEMENTS: ... ', 'Homogeneous Products: ... ', 'No Discrimination: ... ', 'Perfect Knowledge: ... ', 'Free Entry or Exit of Firms: ... ', 'Perfect Mobility: ... ', 'Profit Maximization: ... ', 'No Selling Cost:']
234731
Pure or perfect competition is a theoretical market structure in which the following criteria are met: All firms sell an identical product (the product is a "commodity" or "homogeneous"). All firms are price takers (they cannot influence the market price of their product). Market share has no influence on prices.
887325
Under perfect competition, equilibrium wage rate is determined where demand for labour is equal to supply of labour. In other words, under perfect competition, a labourer will get wage equal to its marginal revenue productivity in the long run. ... DD and SS are the demand and Supply curves of labourers respectively.
1202576
The profit-maximizing choice for a perfectly competitive firm will occur where marginal revenue is equal to marginal cost—that is, where MR = MC. A profit-seeking firm should keep expanding production as long as MR > MC.
1118516
George Box stated that all models are wrong specifically in the context of statistical models. Because the very nature of a model is a simplified and idealized representation of something, all models will be wrong in some sense. Models will never be “the truth” if truth means entirely representative of reality.
439932
Key Takeaways: In a monopolistic market, there is only one firm that dictates the price and supply levels of goods and services. A perfectly competitive market is composed of many firms, where no one firm has market control.
674567
In perfect competition, firms produce identical goods, while in monopolistic competition, firms produce slightly different goods.
304692
Under perfect competition, a business firm can accept losses: only in the short run. ... If a business firm is not operating at the point where MR=MC, then: it is not earning the maximum potential profit or minimizing losses.
447599
An economic model is a simplified description of reality, designed to yield hypotheses about economic behavior that can be tested. An important feature of an economic model is that it is necessarily subjective in design because there are no objective measures of economic outcomes.
447623
– Markets do not work as well for other types of goods. Public goods are neither rival in consumption nor excludable. ... Common resources are rival in consumption but not excludable.
622871
Monopolistic competition is a market structure defined by four main characteristics: large numbers of buyers and sellers; perfect information; low entry and exit barriers; similar but differentiated goods.
1014788
The goods that are characterized by both non-excludability and non-subtractability properties are called pure public goods. ... This category is called impure public goods. A perfect example is a highway system. Once built, everybody who owns a vehicle can use it.
843858
All goods in a perfectly competitive market are considered perfect substitutes, and the demand curve is perfectly elastic for each of the small, individual firms that participate in the market. These firms are price takers–if one firm tries to raise its price, there would be no demand for that firm's product.
1234838
A purely competitive firm is precluded from making economic profit in the long run because: Of unimpeded entry to the industry. If a purely competitive constant-cost industry is realizing economic profits, we can expect industry supply to: Increase, output to increase, price to decrease, and profits to decrease.
158356
Economic market structures can be grouped into four categories: perfect competition, monopolistic competition, oligopoly, and monopoly. The categories differ because of the following characteristics: The number of producers is many in perfect and monopolistic competition, few in oligopoly, and one in monopoly.
1355683
In pure competition there is a large number of sellers, so that each one cannot affect the market price by changing his supply. In monopoly there is a single seller in the market. In pure competition entry (and exit) is free in the sense that there are no barriers to entry.
1312806
Second, an oligopolistic market has high barriers to entry. This condition distinguishes oligopoly from perfect competition and monopolistic competition in which there are no barriers to entry. Third, oligopolistic firms may produce either differentiated or homogeneous products.