Pure Competition Essay -- essays research papers

There are many industries. Economist group them into four market models 1) pure competition which involves a precise large number of staunchs producing a standardized producer. New firms may enter very easily. 2) Pure monopoly is a market structure in which bingle firm is the sole seller a product or service like a local electric company. Entry of additional firms is blocked so that one firm is the industry. 3)Monopolistic competition is characterized by a relatively large number of sellers producing differentiated product. 4)Oligopoly involves only a few sellers this fewness means that each firm is abnormal by the decisions of rival and must take these decisions into account in determining its own price and output. Pure competition assumes that firms and resources are mobile among different kinds of industries. No single firm can influence market price in a competitive industry therefore a firms submit curve is perfectly elastic and price equals marginal revenue. Short- break away profit maximization by a competitive firm can be examine by comparing total revenue and total cost or applying marginal analysis. A firm maximizes its short-run profit by producing that output at which total revenue exceeds total cost by the greatest amount.A complete firm maximizes profit or minimizes loss in the short run by producing that output at which price or marginal revenue equals marginal cost, provided price exceeds minimum average v...