Advertisement Remove all ads

Explain the Implications of the Following in a Perfectly Competitive Market : Large Number of Sellers - Economics

Explain the implications of the following in a perfectly competitive market :

Large number of sellers

Explain the implications of the following:

Large number of sellers in perfect competition.

There are a large number of sellers in a perfectly competitive market. Explain the significance of this feature

Advertisement Remove all ads

Solution 1

Large number of sellers in perfect competition:-

There are a large numbers of sellers, but the supply of an individual firm is only a small fraction of the whole market supply. Here, an individual seller cannot influence the market price by varying the sale in the market. Hence, a firm can supply any amount of goods at the given price. They are only price takers but not price makers.

Solution 2

A perfectly competitive market is a market which consists of buyers and sellers. They produce a homogeneous product. When the number of buyers is more, the demand for an individual buyer is only a small portion of the market demand. Individual buyers cannot influence the market price of a good by varying their demands, and thus, an individual buyer is a price taker and not a price maker

  Is there an error in this question or solution?
Advertisement Remove all ads
Advertisement Remove all ads

Video TutorialsVIEW ALL [2]

Advertisement Remove all ads

View all notifications

      Forgot password?
View in app×