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Advantages and Disadvantages of Perfect Competition

Posted on October 22, 2017July 20, 2024 By Frndzzz

Some of the Advantages and Disadvantages of Perfect Competition are as follows. So let us check out some information on pros and cons of perfect competition to know more about it.

Advantages of Perfect Competition are :

  1. Perfect competition encourages efficiency.
  2. In perfect competiton firms operate at maximum efficiency.
  3. Consumer benefits, Consumers charged at lower price.
  4. Consumers are not exploited in perfect competition, they buys product or services at lower price.
  5. Resources are used more effectively.
  6. Due to high degree of competiton, perfect competition helps allocate resources to most effective use.
  7. Perfect competiton is responsive to consumer wishes.
  8. Price is equal to marginal costs.
  9. Normal profits can be made in long run in perfect competiton.
  10. In perfect competition same quality of products are supplied from all manufacturer.

Disadvantages of Perfect Competition are :

  1. Lack of product variety can be seen in perfect competiton.
  2. Insufficient profits for investment.
  3. In perfect competiton lack of competiton over product design and specification can be seen.
  4. In perfect competiton unequal distribution of income and goods is observed.
  5. No choice as goods are almost identical.
  6. No economies of scale.

Also find out advantantage & Disadvnatages of Monopoly which is related to perfect competition.

More Related Articles:

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  2. What are the Characteristics of Monopoly?
  3. What are the Different Types of Monopoly ?
  4. Why are monopolies bad for consumers ?
  5. Advantages and Disadvantages of Oligopoly
  6. Advantages and Disadvantages of Market System
  7. Difference between Monopoly and Monopolistic market
  8. Difference between Monopoly and Oligopoly
  9. Advantages and Disadvantages of Monopolistic Competition
  10. Difference between Perfect competition and Monopoly
  11. Advantages and Disadvantages of Monopsony
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