ECON 2G03 Lecture Notes - Lecture 3: Profit Maximization, Perfect Competition, Takers

• School: McMaster University
• Department: Economics
• Course: ECON 2G03
• Professor: Krishnakali Sen Gupta

Document Summary

Perfect competition- is a market structure where a large number of buyers and sellers are present, and all are engaged in the buying and selling of the homogenous products at a single price prevailing in the market. Characteristics: both buyers and sellers are price takers, the number of firms is large, there are no barriers to entry, the firms products are identical, there is complete info, firms are profit maximizers. Free entry and exit: condition under which there are no special costs that make it difficult for a firm to enter (or exit) an industry.