From the AQA A Level Economics specification:
• The formal diagrammatic analysis of the perfectly
competitive model in the short and long run.
• The implications of the following for the behaviour of firms
and the industry: large numbers of producers, identical
products, freedom of entry a...
Summary: AQA A-Level Economics - 4.1.5.6 Monopoly and monopoly power
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Economics
4.1.5 Market Structures
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4.1.5.3 Perfect competition
Features of perfect competition:
• Many small buyers and sellers – lots of competition
• No barriers to entry or exit – easy to enter/ exit market
• Homogeneous products – same products
• Perfect information -
Perfectly elastic demand means consumers are extremely responsive to price changes! If a firm puts
their price up by a small amount, their consumers will stop buying from them completely because
they’re so sensitive to price changes. They’ll immediately switch to another seller in the market.
Short run:
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