Pricing in a Perfect Competition Market

Pricing in a Perfect Competition Market

Pricing is an important decision in any types of market. We know that their lot of buyer and sellers in the market. Both the parties buy or sell a particular thing on a fix price. On the other hand, they show their demand for any-thing on a particular price or seller also show interest to sell on a different price.

Demand always represents the buyer behaviour. In this if there is a price rise, buyer buy less quantity and if there is low price of any particular thing, buyer buy more goods and services. On supply side, it has a direct co-relation with price. On high price, we have more supply and on low price, we have less supply.

Pricing in a Perfect Competition Market  

Demand and supply, both are anti-forces which is driven by buyers and sellers. Both anti-forces always run in different direction so when both the forces cross the each other that is the Equilibrium Price. On this price, every buyers and sellers interest to buy & sell all the goods and services.

Pricing in a Perfect Competition Market  

In this table, we mention different – 2 prices, demand and supply. We see different – 2 combination of demand and supply with price. On low price, we have high demand but low supply. On other hand, on high price – we have low demand but high supply. But in the middle on Rs 4, we have equal demand & supply so our Equilibrium price is Rs 4.