ADVANTAGES OF PERFECT COMPETITION

Perfect Competition in market economic

1. ADVANTAGES OF PERFECT COMPETITION Presented by – Sanket Senapati

2. ADVANTAGES OF PERFECT COMPETITION Optimal allocation of resources: Economic efficiency Maximization & effectiveness of utility and service. COMPETITION ENCOURAGE EFFICIENCY: Tight competition between buyers Buyers get efficient as they embrace change in the competitive market.

3. CONTD……. CUSTOMERS BENEFIT: LOW PRICE OF PRODUCTS OR SERVICE PERFECT ENVIRONMENT FOR CONSUMER CUSTOMERS NEED CHANGE THE RESPONSE IS DRIVEN BY CUSTOMERS WISH.

4. DISADVANTAGES OF PERFECT COMPETITION LESS PROFITS: COST OF PARTICIPATING THE COMPETITION PROFIT VS INVESTMENT. DIVERSITY OF PRODUCTS WIDTH AND DEPTH OF THE BRANDS AND PRODUCTS COST INVOLVED IN DEVELOPING AND LAUNCHING NEW PRODUCT OR SERVICE.

5. CONTD…. LIMITATIONS OF PRESENTATION: PRODUCT DESIGNS PRODUCT SPECIFICATIONS INEQUALITY: UNEQUAL DISTRIBUTION OF GOODS(FOR EX HARD DISK) UNEQUAL DISTRIBUTION OF INCOME(EG GLITTER TOOTHPASTE).

6. IS PERFECT COMPETITION REALISTIC? ASSUMPTIONS MARKET MUST SATISFY TO BE PERFECTLY COMPETITIVE ARE RATHER RESTRICTIVE. IN VAST MAJORITY OF MARKETS ONE OR MORE ASSUMPTION OF PERFECT COMPETITION WILL,IN A STRICT SENSE, BE VIOLATED YET WHEN ECONOMISTS LOOK AT REAL-WORLD MARKETS THEY USE PERFECT COMPETITION MORE OFTEN THAN ANY OTHER STRUCTURE.

7. IS PERFECT COMPETITION REALISTIC…. WHY IS THIS? MODEL OF PERFECT COMPETITION IS POWERFUL MANY MARKETS-WHILE NOT STRICTLY COMPETITIVE-COME REASONABLY CLOSE. WE CAN EVEN-WITH SOME CAUTION-USE MODEL TO ANALYZE MARKETS THAT VIOLATE ALL THREE ASSUMPTIONS. PERFECT COMPETITIONS CAN APPROXIMATE CONDITITIONS AND YIELD ACCURATE ENOGH PREDICTIONS IN A WIDE VARIETY OF MARKETS.