Now, perfect competitionĪs I talked about, it's a bit of a theoretical idea. Who is selling anything, So you can decide what Taker, you are a price setter, price setter. Insurmountable, mountable, I'll just abbreviate it,īarriers, especially to enter, and instead of being a price
Instead of no barriers to entry or exit, here we have the exact opposite, so you could say insurmountable, Instead of an undifferentiated product, well, it's differentiatedīecause it's the only firm. Selling or many firms producing, you have exactly one firm producing. Now the other extreme, this is where we have The market, both the buyers, the many buyers and the many sellers, they all know what the If they were to go above the market price, well then no one will buy from them, and so they will justīe price, price takers, and other things that we assumeĪbout perfect competition is that all of the actors in They get the product from, none of those firms can
Why do they need to be price takers? Well, whatever the market price is, since no one cares which of these firms, which of these many firms Talked about in other videos, they need to be price takers. The firms over here, well, they have noīarriers to entry or exit, so no barriers to entry or exit. This is where they are sellingĪn undifferentiated product or service, undifferentiated, That in the other videos, but just as a review, this Perfect competition, perfect competition, and we've talked about Now at the left end, we can imagine this idealized Means to be a monopoly, and so to help us appreciate that, let's think about the spectrum In this video, we're going to dig a little bit into the idea of what it
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