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Assume that market for tennis balls is perfectly competitive When one tennis ball producer exits the market the price of tennis balls will?
RISE!
The more producers that have to compete with each other on the market, the more chance there is that each will try to draw any business by lowering its price to the consumer.
Sometimes, questions like this can be solved by imagining the ultimate scenario:
Imagine for a moment that suddenly ALL tennis ball producers closed down except one. That one could ask almost any price for its tennis balls that a large proportion of players was prepared to pay ... the company would have much trouble in managing to cater for everyone anyway - until it had time to expand and meet market demand.
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What does a diagram of a perfectly competitive market look like?
A diagram of a perfectly competitive market typically shows a horizontal demand curve representing perfect competition, a horizontal supply curve at the market price, and a point where supply equals demand to show equilibrium. It also includes the producer and consumer surplus to illustrate market efficiency.
Is cigarette market a perfectly competitive market?
There is no such thing as a perfectly competitive market. It is merely a economic model to compare other market structures to. Cigarette market is more likely a oligopoly.
How are prices set in a perfectly competitive market?
By Market Force
Is the used car market perfectly competitive?
no
Do perfectly competitive firms advertise?
Perfectly competitive firms would not advertise as advertising would serve no purpose. A market that is perfectly competitive exists only in theory.
What are the example of short period local perfectly competitive market?
poultry market rice market
Is stock exchange an example of perfectly competitive market?
Yes
In a perfectly competitive market an increase in demand will in the long run generally cause?
An increase in demand in a perfectly competitive market will lead to an increase in revenue for the business. The more they sell the more they will make.
Does a perfectly competitive market demonstrate the need for subsidies and price ceilings?
no
Characteristics of perfect competitive market?
A perfectly competitive market has many competitors. There is no one competitor that has more say in product prices within the industry.
In a perfectly competitive market, individual consumers have _____.?
no influence over determining price
In a perfectly competitive market individual consumers have .?
no influence over determining price
