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.
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| 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.
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| 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.
