Explanation
Perfect competition is a type of market where there are huge number of buyers and sellers who deals in the same type of product due to which no individual unit is able to influence the price of the product.
Under perfect competition, there is freedom of entry and exit of firms. Therefore, when there is super-normal profits or losses the firms in the market enter and exit respectively due to which the firms in the industry only earn normal profits in the long run.
And the seller have to quote the price that prevails in the market which usually remains uniform due to such large involvement of the masses. Therefore, agriculture is the best example of a perfectly competitive market.
Perfect competition is a type of market where there are huge number of buyers and sellers who deals in the same type of product due to which no individual unit is able to influence the price of the product
And the seller have to quote the price that prevails in the market which usually remains uniform due to such large involvement of the masses. Therefore, it is a theoretical economic concept which is not actual in reality.
Production possibility curve shows all different attainable combinations of the production of two commodities that can be produced in an economy with given the resources and technology which are to be fully utilized.
When the resources are reduced due to some reason like natural calamity in the economy then the production of commodities also decreases as they use these resources to develop the commodities. Therefore, if the production of the commodities decreases it leads to leftward shift in the production possibility curve.
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