Business
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Social ScienceHow do firms in a competitive market work?
Expert Answer
Perfect competition is a market where there are lage number of seller and buyers of identical and homogenous products. All the firms are selling a single product and there is a free entry and exit of firms in the maarket.
As the products are identical, the sellers do not incurr any selling cost like advertisement, etc.
The sellers are mainly price taker in the market not the price maker. They have to accept the price fixed by the market forces and cannot be able to set the price above or below the market price set b market forces of industry. ...
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