Competitor Market Analysis: Why It Is Necessary

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Frequently Asked Questions About Perfect Competition
Are there types of perfect competition?
Some economists propose a classification based on the time criterion. Short-term competition assumes an unchanging state of factors of production in the short period. This means that the number of producers is stable, and the level of production, as well as prices, does not change.

The long-term variant allows for changes in guatemala telegram number database the sphere of production factors: the emergence of new sellers, fluctuations in production capacity. In this case, the market price will tend to the cost price, so that the firm's profit under such perfect competition will decrease.

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What are the differences between perfect competition, monopolistic competition, oligopoly and monopoly?
There are several differences, but the most simple and obvious is the number of producers and sellers. Monopoly, as the name suggests, is the presence of one seller, and this model is encountered in practice. In an oligopoly, there are several producers, and each of them controls a significant share of the market: an example of this kind is the situation in the modern cellular communications market.

Monopolistic competition implies the presence of a large number of sellers, but they may differ from each other in production capabilities. The maximum possible number of small producers is the main feature of perfect competition.