Competetive Markets

What are features of a competetive market?- 4

1. There are many buyers and many sellers

2. Firms are price takers- they must all retain the same( low) price

3. Goods and services sold are homogeneous

4. Competetive markets possess low barriers to entry

List the advantages to firms of a competetive market. -2

1. Forced to maintain high productivity and low costs of production

2. Forced to produce high-quality goods and services

Why do firms have to be forced to maintain high productivity and low costs of production?

WB

Why do firms have to be forced to produce high-quality goods and services

WB

List the disadvantages to firms in competetive markets- 4 and explain them all on the WB

1. Costs of the factors of production

2. Reduced prices

3. Advertisement costs

4. Market share + economies of scale

How is a lack of market share and economies of scale a disadvantage to firms in comeptitve markets

WB

How are the costs of factors of production a disadvantage to firms in comeptitve markets

WB

How are advertisment costs a disadvantage to firms in comeptitve markets

WB

List the advantages to workers in a competetive market- 1

1. Higher wages

List the disadvantage to workers in a competetive market- 1

1. Termination of jobs and lower wages

List the advantages to consumers in a competetive market- 2

1. High quality, unique goods and serivces

2. Low prices

List the disadvantages to consumers in a competetive market- 2

1. Low quality goods and services

2. Higher prices