What are the characteristics of pure competition in economics?
Understand the Problem
The text discusses the concept of pure competition in economics, outlining its characteristics and implications for market structure.
Answer
Large number of sellers, homogeneous products, price-taking firms, easy entry/exit, no non-price competition.
The characteristics of pure competition include: 1) a large number of independent sellers, 2) homogeneous products, 3) price-taking firms, 4) freedom of entry and exit, and 5) no non-price competition.
Answer for screen readers
The characteristics of pure competition include: 1) a large number of independent sellers, 2) homogeneous products, 3) price-taking firms, 4) freedom of entry and exit, and 5) no non-price competition.
More Information
Pure competition is characterized by markets where firms sell identical products and have no control over prices, allowing for free market entry and exit.
Tips
Avoid confusing pure competition with monopolistic competition, where products may be differentiated.
Sources
- 8/9a Pure Competition - Characteristics and Short Run Equilibrium - .harpercollege.edu
- Pure Competition | Definition & Examples - Lesson - Study.com - study.com
- What is Pure Competition: Basics | SendPulse - sendpulse.com
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