ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -buyers can expect to find consistently low prices and wide availability of the goods that they want. producers can expect to be able to set prices at the level they choose. it is hard for a seller to enter the market due to barriers to entry. firms will leave the market if they are making economic profits.

Detailed explanation-2: -Greater competition among sellers results in a lower product market price. If the same popular toy had numerous producers instead of only one, the price would be lower because the producer knows the consumer could get the toy somewhere else.

Detailed explanation-3: -In the long run in a perfectly competitive market-because of the process of entry and exit-the price in the market is equal to the minimum of the long-run average cost curve. In other words, goods are being produced and sold at the lowest possible average cost.

Detailed explanation-4: -A perfectly competitive market is an ideal market where there are many well-informed buyers and sellers, no barriers to market entry and no possibility of a monopoly. Profit, diminishing supply, rivalry and exclusion are among the 10 characteristics of a competitive market.

Detailed explanation-5: -In a competitive market, sellers compete against other suppliers to sell their products and buyers bid against other buyers to obtain the product. This competition of sellers against sellers and buyers against buyers determines the price of the product. It’s called supply and demand.