How is price determined in market with pure competition? (1 Viewer)

Time&moretime

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Supply and demand. I'm sure there are Economics students on this forum who would be able to give you a more sophisticated explanation.
 

laterz laterz

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not sure but ill just type it down

the forces of supply and demand help determine the equilibrium quantity and price at which a product will be sold i.e. there is no government intervention regarding quantity or prices for goods & services
 

AuroraXT

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In pure competition (or a perfectly competitive market), the market is saturated with consumers and suppliers.This means that the selling price in the market is purely determined by the intersection between demand and supply (the price at which the quantity of the good/service consumers want to buy equals to the quantity of the good/service suppliers want to supply). This is because if a supplier wanted to sell above the market price, consumers would just acquire the good from their competitors since there are many other suppliers of the same good/service. Similarly, consumers would be turned down if they suggested a lower price because there are many other consumers who want the good/service in the saturated market.
 

nourished.

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To put simply, it is wherever the demand curve and supply curve meet. It is the price and quantity that producers are willing to sell for and consumers are willing to buy for.
 

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