What is the concept of market competition?
1 Answer
Jan 21, 2015
There is market competition when economic profits are zero in the long run. That happens when prices equalizes marginal costs.
p = mc
That is the cost of producing one extra unit of the good will be the exact price charged by that good.
The firms operating in this market face a perfect elasticity of demand for their products, therefore, any increase in their prices will make them lose sales because there are several actors in this market.
