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Conditions Necessary for Perfect Competition in Resource Markets: A Comparative Study

This article outlines the essential conditions for achieving perfect competition in resource markets. It highlights the importance of a large number of buyers and sellers interacting in the market, the need for identical products that are perfect substitutes, and the absence of barriers to entry or exit, allowing free movement of sellers. Additionally, it contrasts perfect competition with monopoly, emphasizing the differences in market structure, price setting, and consumer choice. Understanding these concepts is vital for both economists and business professionals.

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Conditions Necessary for Perfect Competition in Resource Markets: A Comparative Study

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  1. Two Resource Markets

  2. Conditions Necessary for Perfect Competition in a Market 1. A large number of buyers and sellers. 2. Resources or products offered by all sellers are identical (i.e., they are perfect substitutes). 3. No barriers to enter or exit the market; sellers can freely enter or leave.

  3. Perfect Competition versus Monopoly

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