Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A perfectly competitive market is the market that has large number of buyers and sellers, selling homogeneous goods and services. All the firms are the price takers and take price as given in the market.
There are no barriers to enter in the market and any firm can enter or exit from the industry freely. All the firm can earn positive or negative economic profits in the short-run, but in long-run all the firms will make normal profits.
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