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6 October, 12:08

Under which market structure does a firm have negligible influence over product pricing

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  1. 6 October, 12:14
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    This is perfect Competition market.

    Perfect competition describes a market structure, where a large number of small firms compete against each other. In this type of market a single firm does not have any significant market power. As a result the industry as a whole produces the socially optimal level of output, because none of the firms have the ability to influence market prices. The idea of perfect competition is built on a number of assumptions which includes: all firms maximize profits, there is free entry and exit to the market, all the firms sell completely identical goods and there are no consumer preferences. This is an ideal market.
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