Questions tagged [perfect-competition]

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3 votes
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How is it possible for demand to be perfectly elastic under perfect competition?

So according to perfect competition, a single firm is a price taker, having to sell at the equilibrium price as determined by supply and demand. As you can see from the single firm graph, demand is ...
Anthony Fallone's user avatar
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Perfect competition allocations

Suppose the market demand is $P(Q) = \alpha - \beta(Q)$ where $Q = \sum q_1$. Variable $q_i$ denotes the output of the $i$th firm and $Q$ is the total output. The marginal cost for each firm is $c$. ...
Rick_Morty's user avatar