Perfect competition is a model of the market that assumes all of the following EXCEPT

Your choices??

Your answer??

PLEASE HELP ME WITH MY ASSIGNMENT..

A store selling stationery supplies sells 50 pens at the equilibrium price. The supply curve
for pens is given by QS = 40 + 6P. At the market equilibrium, the own price elasticity of the demand for
pens is estimated to be -6.5. Using the provided information answer the following questions:
[4] a) Derive the linear demand curve for pens.

[2] b) Suppose now that due to higher input prices, the supply curve for pens shifts to QS = 30 + 6P.
Assuming that the demand curve is unaffected, what is the new equilibrium price and quantity in the pen
market?

[5] c) Suppose that the government sets a price of $1.70 per pen. Using the supply curve from (b) and the
demand curve derived in (a) calculate the quantity demanded and quantity supplied at the government set
price. Is there a shortage or surplus at the government price? How big is it? In a diagram with price of
pens on the vertical axis and quantity of pens on the horizontal axis, graph both curves and clearly
indicate the equilibrium price and quantity from (b) and the shortage or surplus due to government
intervention.

To determine which assumption is NOT a part of perfect competition, we need to understand the characteristics of perfect competition first. Perfect competition is a theoretical model that represents an idealized market structure. It assumes the following characteristics:

1. Many buyers and sellers: In perfect competition, there is a large number of buyers and sellers in the market.

2. Homogeneous products: The products sold in a perfect competition market are identical or very similar.

3. Perfect information: Both buyers and sellers have complete and accurate information about the market conditions, including prices, quality, and availability.

4. Free entry and exit: There are no barriers to entry or exit in the market. New firms can easily enter the market, and existing firms can exit without incurring significant costs.

5. Price takers: In perfect competition, individual firms have no control over the market price. They are price takers, meaning they have to accept the prevailing market price.

Based on these characteristics, we can conclude that perfect competition does not assume any barriers to entry and exit in the market. Therefore, the answer is "barriers to entry and exit."