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Monopolistic Competition Essay

1255 Words6 Pages

Monopolistic Competition

The market is a place where supply and demand of goods and services can meet as a constant and organized form of lead in mutual contact, as a group of buyers and sellers. The market is also the mechanism by which the regulation of relations between sellers and buyers, the actual or potential mutual acted upon, determine the cost of individual product or set of products. As a starting point for discussion about the competition by taking advantage of the division of market structure on which there are two basic types: perfect, ie. concurrency complete and imperfect, ie, imperfect competition.
Perfect competition is such a market condition in which there are many of sellers and buyers in the market the same, homogenized product and when all products have price and traded on the market and market participants have no impact on the price at which to buy or sell, i.e. the price is fair given size.
Price change is a result of the activities of all sellers and buyers, and not the consequences of their individual actions. So, the perfect competitive markets individual producers are actually undertakes the price, so-called. price-takers. It follows that a perfectly competitive market such a market in which all firms produce identical products, and each company is so small that his choice of the level of production is affected neither by the entire industry, nor the price. In practice it is rarely encountered such examples, eg. in the production of wheat,

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