Assessment 9
Started on Thursday, 26 September 2024
State Finished
Completed on Thursday, 26 September 2024,
Time taken
Marks 11.00/11.00
Grade 100.00 out of 100.00
Question 1
I confirm
that this assessment will be my own individual work;
that I will not communicate with anyone else in any way during the completion of this
assessment;
that I will not cheat in any way in completing and submitting this assessment.
I confirm.
I do not confirm.
Question 2
A perfectly competitive market is described as a market with
a few buyers, many sellers and the production of differentiated goods.
a few firms producing differentiated goods.
many buyers, many sellers and the production of homogenous goods.
1
a large number of firms that each individually sets the price of their goods.
Feedback
In a perfectly competitive market, there are many buyers and sellers, all of whom are
small relative to the size of the market. This market structure is characterised by
several key features:
1. Many Buyers and Sellers: There are numerous buyers
and sellers in the market, and no single buyer or seller has
the power to influence the market price. Each buyer and
seller is a price taker, meaning they accept the market
price as given and cannot change it.
2. Homogeneous Products: The products or services sold
in a perfectly competitive market are homogeneous
(meaning they are identical and indistinguishable from one
another).
3. Perfect Information: All buyers and sellers in a perfectly
competitive market have access to perfect information. T
4. Free Entry and Exit: There are no barriers to entry or exit
in the market.
5. Firms are Price Takers: Each firm in a perfectly
competitive market is so small compared to the overall
market that its actions cannot affect the market price.
Therefore, each firm accepts the market price as given
and adjusts its quantity of output to maximise profits at that
price.
6. Profit Maximisation: Firms in a perfectly competitive
market aim to maximise profits.
7. No government intervention: The market answers the
questions What? How? and For whom
2
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