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Pages 6 (1506 words)
Name Instructor’s Name Course Date of Submission Perfect Competition Introduction A market is a place where buyers and sellers meet each in order to exchange goods and services. There are different kinds of markets and these markets are differentiated on the basis of their characteristics.
This writing will focus on markets that are perfectly competitive in nature. This writing will focus on various characteristics of perfectly competitive markets and how buyers and sellers behave in such markets. The first section of the assignment will focus on the reaction of sellers to changes in demand for their goods and services. The second section of the writing will compare and contrast the characteristics of a perfectly competitive market with the characteristics of New York Stock exchange (NYSE). Body According to the law of demand when the demand for a product increases, the price of the product even elevates and vice-verse. Due to these changes in demand the marginal revenue that is being earned by a particular industry even alters. In order to analyze the changes that organizations in a perfectly competitive market experience as a result of changes in demand for a product, let us assume that the product being sold is bread. Let’s assume that according to research, eating brown bread helps individuals in preventing diabetes. Such revelations positively impact the demand for particular product. Let’s assume that the bread industry is a perfectly competitive industry and is currently experiencing long-run equilibrium at a price of $1.7 per loaf of bread and the value of the economic profit is equivalent to zero. ...
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