Essays Tagged: "price takers"

What are the assumptions behind the model of a perfectly competitive industry in long-run equilibrium?

mber of buyers. In competition all firms are too small to have an influence and so they will act as price takers and will charge at the equilibrium (P1):Figure 1A perfectly competitive market has to h ... a great amount of buyers and suppliers so that one buyer or supplier will not influence the market price. Buyers are assumed to have perfect knowledge of what is happening on the market (the market c ...

(4 pages) 134 0 4.7 Jan/2003

Subjects: Social Science Essays > Economics

Briefing Paper on endogenous growth theory in connection of forth-coming meeting with CBI and a Treasury team.

on function with diminishing returns to capital and labour. The second assumption is that firms are price takers in a competitive market place. In other words, no individual firms are assumed to hold ...

(5 pages) 54 0 5.0 Apr/2004

Subjects: Social Science Essays > Economics

"Monopoly is against the interest of the consumer." To what extent do you agree with this statement and why?

(water companies) or local (petrol station). Unlike a perfect competition situation were firms are 'price takers' and only respond to consumer demand, a monopoly finds itself in an imperfect competiti ... poly finds itself in an imperfect competition market. In this type of market the firm is more of a 'price maker' and can therefore influence the market price. When comparing monopoly and perfect compe ...

(6 pages) 161 0 3.3 Jan/2006

Subjects: Social Science Essays > Economics

RPL-MRPL-Assessing Risk and Return

The CAPM assumes ideal security markets in the sense that: (a) markets are large, and investors are price takers, (b) there are no taxes or transaction costs, (c) all risky assets are publicly traded, ... trage Pricing TheoryAn arbitrage opportunity arises when the disparity between two or more security prices enables investors to construct a zero net investment portfolio that will yield a sure profit. ...

(11 pages) 351 1 3.0 Jul/2008

Subjects: Businesss Research Papers > Case Studies

OPEC As A Cartel

ke a decline in stocks, indicating that Wall Street has already built a lot of pessimism into stock prices.U.S. Treasury bonds, on the other hand, fell sharply, as bond investors expected the data to ... in the figure below:A shift in the aggregate demand from AD to AD1 has led to a drop in the average price level in the economy from P to P1.Due to such a fall in the AD, business profitability is bein ...

(6 pages) 25 0 0.0 Apr/2009

Subjects: Social Science Essays > Economics

Maximizing Profits in Market Structures

e market structures are similar in many ways but have different traits. In a competitive market the price is set, in a monopoly the seller sets the price of their products, and in an oligopoly market ... ce of their products, and in an oligopoly market a group of companies set production to control the price of the market.There are two characteristics of a competitive market, there are many buyers and ...

(5 pages) 51 0 0.0 Mar/2010

Subjects: Social Science Essays > Economics