Perfect Competition

List two common barriers that prevent firms from entering the market.

Two common barriers that prevent firms from entering the market are imperfect competition and start up costs.

In a perfect market what forces price to go up for a commodity?

Competition among buyers for the commodity.

Overtime in a perfect competition, what will happen to output, as compared to cost, from the suppliers' point of view?

Output will reach the point where suppliers are just covering their costs.

Define perfect competition.

Perfect competition is a market structure where a large number of firms all produce the same product.

What are start up costs?

Start up costs are expenses that a firm must pay before it can produce and sell its product.

What effect can technology have on perfect competition?

Technology can become a barrier to entry for producers.

What are the four conditions in place in a perfectly competitive market?

The four conditions that in place, in a perfectly competitive market are; many buyers and sellers, identical products, informed buyers and sellers, and free market entry and exit.

What happens when an individual producer tries to raise the price of its product in a perfectly competitive market?

The individual producer who tries to raise price will not be able to sell their product.

In comparing a perfect market to an imperfect market, would you expect prices of goods and services to be lower or higher in the imperfect market?

You would expect the prices to be higher.

Early capitalist economists argued that supply-and-demand pricing worked better without any _______.

regulations.