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Advantages and Disadvantages of Perfect Competition

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.

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Find out Advantages and disadvantages of planned economy (command economy) listed below. So let us check out points on advantages and disadvantages to know more about planned economy. This type of economy system is controlled by governement. In Planned economy, government decides how much is produces, what to produced, the methods of the production and the price of goods or services.

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Check out Advantages and disadvantages of market economy (capitalism) given below. So let us find out some points on advantages and disadvantages to know more about market economy. This type of economy is nearly free fro governement interference, Economy is based on private ownership where individual control the production, distribution and sales of goods and services.

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