PRINTABLE FOR KIDS

XII (12) HSC

XI (11) FYJC
X (10) SSC

### Define perfect competition and explain price determination under perfect competition.

Meaning: -A perfect competition is a market situation where there are large number of buyers and sellers buying and selling homogeneous products at single uniform price. Perfect competition is an idealistic concept and not a real one. Perfect competition may be applicable to certain products and that too for a certain period, and may be in a selective part of the market.

Price Determination under Perfect Competition
Equilibrium price: Equilibrium price is the price at which quantity demanded is equal to quantity supplied. The price of the product under perfect competition, is influenced by both buyers and sellers and equilibrium price is determined by the interaction of demand and supply forces. According to Marshall, demand and supply are like two blades of a pair of scissors. Just as cutting of cloth is not possible with the use of one blade, the equilibrium price of a commodity cannot be determined, either by the forces of demand or by supply alone. Both together determine the price.
We can study this with the help of the following table and graph.

Table No. 5.1 – Demand and Supply Schedule
 Price () Per Unit Quantity Demanded (Units) Quantity Supplied (Units) 5 100 500 4 200 400 3 300 300 2 400 200 1 500 100

Above table shows the effect of price on market demand and market supply. The table shows that when price of the commodity is  5, quantity demanded is 100 units and quantity supplied is 500 units. Since supply is more than demand, price falls to  4/- and  3/-, respectively and quantity demanded extends to 200 and 300 units whereas supply contracted to 400 and 300 units, respectively. It is seen that quantity demanded and that quantity supplied both are equal at ? 3 where quantity demanded is 300 units whereas quantity supplied is 300 units. Thus,  3 will be an equilibirim price.
If further price falls to  2 and  1, quantity demanded will expand to 400 and 500 units, respectively and quantity supplied will contract to 200 and 100 units respectively. Since demand is more than supply, competition among buyers will increase and price will rise up to  2 and  3. Thus equilibrium price will be  3 per unit because demand and supply both are equal at this price.
E     -    Equilibrium point
OP   -    Equilibrium price
OQ   -    Equilibrium quantity demanded and supplied
On the 'x' axis we measure quantity demanded and quantity supplied and on the 'y' axis we measure price of the commodity. In the above diagram 'DD' is a downward slopping demand curve indicating inverse relationship between price and quantity demanded. 'SS' is an upward slopping supply curve indicates direct relationship between price and quantity supplied. Both the curve intersects each other at point 'E'. At this point the equilibrium price is ` 3/- and equilibrium demand and supply is 300 units.

## PDF FILE TO YOUR EMAIL IMMEDIATELY PURCHASE NOTES & PAPER SOLUTION. @ Rs. 50/- each (GST extra)

SUBJECTS

HINDI ENTIRE PAPER SOLUTION

MARATHI PAPER SOLUTION
SSC MATHS I PAPER SOLUTION
SSC MATHS II PAPER SOLUTION
SSC SCIENCE I PAPER SOLUTION
SSC SCIENCE II PAPER SOLUTION
SSC ENGLISH PAPER SOLUTION
SSC & HSC ENGLISH WRITING SKILL
HSC ACCOUNTS NOTES
HSC OCM NOTES
HSC ECONOMICS NOTES
HSC SECRETARIAL PRACTICE NOTES

2019 Board Paper Solution

HSC ENGLISH SET A 2019 21st February, 2019

HSC ENGLISH SET B 2019 21st February, 2019

HSC ENGLISH SET C 2019 21st February, 2019

HSC ENGLISH SET D 2019 21st February, 2019

SECRETARIAL PRACTICE (S.P) 2019 25th February, 2019

HSC XII PHYSICS 2019 25th February, 2019

CHEMISTRY XII HSC SOLUTION 27th, February, 2019

OCM PAPER SOLUTION 2019 27th, February, 2019

HSC MATHS PAPER SOLUTION COMMERCE, 2nd March, 2019

HSC MATHS PAPER SOLUTION SCIENCE 2nd, March, 2019

SSC ENGLISH STD 10 5TH MARCH, 2019.

HSC XII ACCOUNTS 2019 6th March, 2019

HSC XII BIOLOGY 2019 6TH March, 2019

HSC XII ECONOMICS 9Th March 2019

SSC Maths I March 2019 Solution 10th Standard11th, March, 2019

SSC MATHS II MARCH 2019 SOLUTION 10TH STD.13th March, 2019

SSC SCIENCE I MARCH 2019 SOLUTION 10TH STD. 15th March, 2019.

SSC SCIENCE II MARCH 2019 SOLUTION 10TH STD. 18th March, 2019.

SSC SOCIAL SCIENCE I MARCH 2019 SOLUTION20th March, 2019

SSC SOCIAL SCIENCE II MARCH 2019 SOLUTION, 22nd March, 2019

XII CBSE - BOARD - MARCH - 2019 ENGLISH - QP + SOLUTIONS, 2nd March, 2019

HSC Maharashtra Board Papers 2020

(Std 12th English Medium)

HSC ECONOMICS MARCH 2020

HSC OCM MARCH 2020

HSC ACCOUNTS MARCH 2020

HSC S.P. MARCH 2020

HSC ENGLISH MARCH 2020

HSC HINDI MARCH 2020

HSC MARATHI MARCH 2020

HSC MATHS MARCH 2020

SSC Maharashtra Board Papers 2020

(Std 10th English Medium)

English MARCH 2020

HindI MARCH 2020

Hindi (Composite) MARCH 2020

Marathi MARCH 2020

Mathematics (Paper 1) MARCH 2020

Mathematics (Paper 2) MARCH 2020

Sanskrit MARCH 2020

Important-formula

THANKS