Explain any two main features of perfect competition. - Vidyadip

Question

Explain any two main features of perfect competition.

✓

Answer

Main features of perfect competition:

Large number of buyers and sellers. The share of a single seller in total output is insignificant, so he has no influence over price of the product. Similarly a single buyer has no influence over price.
The product is homogeneous. The products produced by different producers are taken to be homogeneous by buyers, so no producer is able to charge a different price for his produce.
There is freedom of entry and exit of firms. As a result of this no firm will earn abnormal profits or incur losses in the long run.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "3 Marks Question" from The theory of the firm under perfect competition→The theory of the firm under perfect competition — all question types→Economics STD 12 Humanities & Commerce question papers→Rajasthan Board STD 12 Humanities & Commerce question papers→Rajasthan Board question paper generator→

Similar questions

What are margin requirements? How does lowering or raising of margin requirements affect availability of credit?

At the market price of Rs. 10, a firm supplies 4 units of output. The market price increases to Rs. 30. The price elasticity of the firm’s supply is 1.25. What quantity will the firm supply at the new price?

From the following information about a firm, find the firm's equilibrium output in terms of Marginal Cost and Marginal Revenue. Give reasons. Also find profit at this output.

Output (units)	Total Revenue (₹)	Total Cost (₹)
1	6	7
2	12	13
3	18	17
4	24	23
5	30	31

Total Revenue is ₹ 400 when the price of the commodity is ₹ 2 per unit. When price rises to 3 per unit, the quantity supplied is 300 units. Calculate the Price Elasticity of Supply.

What are implications of fiscal deficit?

Why does an economic problem arise?###State any two causes of economic problem.###State two characteristics of the economic resources which give rise to economic problem.###hy does problem of choice arise?###Explain three factors that lead to an economic problem.

Calculate Average Revenue (AR) and Marginal Revenue (MR):

Units Sold	1	2	3	4	5	6	7
TR (₹)	20	36	48	56	60	60	56

Calculate TR, AR and MR from the following data.

Price (₹)	10	11	12	13	14	15	16
Units Sold	-	9	-	7	-	5	-
TR (₹)	100	-	96	-	84	-	64
MR (₹)	-	-	-	-	-	-	-

A firm can sell more units of a good as it wants at a given price. Draw (a) TR curve (b) AR and MR curves of a firm. State the relationship between AR and MR curves in this case.

OR

Draw TR and MR curves of a firm which is free to sell any quantity of the good at a given price. Explain.

If the Real Gross Domestic Product is ₹ 250 and the Price Index (base=100) is 120, calculate the Nominal Gross Domestic Product.