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YASHU SHARMA PERFECT COMPETITION AND IMPERFECT COMPETITION.pptx

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YASHU SHARMA PERFECT COMPETITION AND IMPERFECT COMPETITION.pptx

  1. 1. Name: Yashu Sharma Roll no : 75 Class: B.B.A College: I.P (P.G) College, Campus 2 Bulandshahr
  2. 2. Presentation Topic: Difference betweenperfect and imperfect competition
  3. 3. PERFECT COMPETITION DEFINITION : Perfect competition describes a market structure where competition is at its greatest possible level.To make it more clear, a market which exhibits the following characteristics in its structure is said to show perfect competition:
  4. 4. FEATURES OF PERFECT COMPETITION  1. Large number of buyers and sellers 2. Homogenous product is produced by every firm 3. Free entry and exit of firms 4. Zero advertising cost 5. Consumers have perfect knowledge about the market and are well aware of any changes in the market. Consumers indulge in rational decision making.
  5. 5. 6. All the factors of production, viz. labour, capital, etc, have perfect mobility in the market and are not hindered by any market factors or market forces. 7. No government intervention 8. No transportation costs 9. Each firm earns normal profits and no firms can earn super-normal profits. 10. Every firm is a price taker. It takes the price as decided by the forces of demand and supply. No firm can influence the price of the product.
  6. 6. IMPERFECT COMPETITION  DEFINITION : Imperfect competition is a competitive market situation where there are many sellers, but they are selling heterogeneous (dissimilar) goods as opposed to the perfect competitive market scenario. As the name suggests, competitive markets that are imperfect in nature.
  7. 7. FEATURES OF IMPERFECT COMPETITION  Imperfect competition refers to any economic market that does not meet the rigorous assumptions of a hypothetical perfectly competitive market.  In this environment, companies sell different products and services, set their own individual prices, fight for market share, and are often protected by barriers to entry and exit.  Imperfect competition is common and can be found in the following types of market structures: monopolies, oligopolies, monopolistic competition.  Economists generally agree that real-world markets rarely meet the assumptions of perfect competition, but disagree as to how much of a substantial difference this makes for market outcomes. 
  8. 8. PERFECT COMPETITION V/S IMPERFECT COMPETITION PERFECT COMPETITION  When the condition is not met, it is considered imperfect competition.  The markets we have in real life are all imperfect.  While in the case of imperfect competition, there can be few to many players. IMPERFECT COMPETITIUON  In a competitive market where there are many buyers and sellers, the sellers sell identical products to the buyers, then it is known as perfect competition.  Perfect competition is theoretical; it is impossible to find a perfectly competitive market. Perfect competition is usually used as a standard; it has no real-life example. However, there are inferences the market players may get from the conditions of perfectly competitive markets.  In the case of perfect competition, there are always many players in the market.
  9. 9. PERFECT COMPETITION  While the sellers in the case of an imperfectly competitive market sell non-identical products.This means that sellers in the imperfectly competitive market choose their own specialties according to their knowledge and choice.  In imperfectly competitive markets, the barriers to entry not only exist but may also be very high so that no new participant may easily enter the market.  In the case of imperfectly competitive markets, the sellers can decide the prices so they are price makers. IMPERFECT COMPETITION  In a perfectly competitive market, the sellers sell identical products.  There are no barriers to entry and exit in the perfectly competitive market which is not true in the case of non- competitive markets.  In the case of a perfectly competitive market, the sellers cannot decide the price of the products.The prices are set by market forces. So, the sellers are price takers in competitive markets.
  10. 10. CONCLUSION: All markets in the world are imperfect and as we know there are many instances in which no condition of perfect competition is obeyed by market participants.The real markets run in the profit motive and the players in it are interested in making the maximum profit possible. Therefore, they do not obey the conditions of perfect competition. However, perfect competition is a good theoretical condition that may be taken as a reference to make the real markets as justified as possible. By following the conditions of perfect competition, the markets may be made to conform to the best possible norms. However, in day-to-day life, no company is interested in following the conditions of perfect competition.
  11. 11. Thankyou ❣️

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