savio13
Savio Cabral
A market becomes perfectly competitive when the following conditions exist:
(v) Perfect Mobility of Factors of Production: Factors of production are assumed to be freely mobile geographically and occupationally. It mainly applies to labour and capital. Perfect mobility helps diverting the factors to those areas where there is more demand from the one where demand is deficient. It helps adjust supply according to demand.
(vi) No Transport Cost: Factors of production and goods are transported from the place of production to the market without any cost. Transport cost does not arise if we take small geographical areas where production and sale takes place within that areas.
Agricultural products can be sold in the same village or town without incurring much transport cost. This condition is assumed to avoid any possibility of charging a higher price on the pretext of transport cost.
(v) Perfect Mobility of Factors of Production: Factors of production are assumed to be freely mobile geographically and occupationally. It mainly applies to labour and capital. Perfect mobility helps diverting the factors to those areas where there is more demand from the one where demand is deficient. It helps adjust supply according to demand.
(vi) No Transport Cost: Factors of production and goods are transported from the place of production to the market without any cost. Transport cost does not arise if we take small geographical areas where production and sale takes place within that areas.
Agricultural products can be sold in the same village or town without incurring much transport cost. This condition is assumed to avoid any possibility of charging a higher price on the pretext of transport cost.