Check out Myhomeworkhelp.com Equilibrium in Competitive Factor Help and complete Assignments
To understand equilibrium in competitive factor, the first thing that needs to be understood is what a competitive factor market is. The market where different facilities of production factors are sold or bought is called the factor market. Examples of such markets could be capital markets, raw material markets, labor markets, etc. Equilibrium in a competitive factor homework help can be a good guide to understanding competitive factor markets more clearly.
After getting knowledge about competitive factor markets, there comes a need to understand what equilibrium means. At the time of making a decision for hiring any production factor, a firm always compares the market price of that factor and its marginal cost, and the following conclusions are made –
- When the market price of the factor is more than its marginal cost, the firm employs the factor because it shows a situation of generating revenue for the firm.
- When the factor shows to have a market price lower than its marginal cost, the firm decides not to employ it because it would increase the cost to the firm which in turn will result in loss of revenue.
- There can also be a situation where the market price of the factor equals to its marginal cost; this is the situation that is referred to as equilibrium. A better knowledge of the topic if needed can be done by visiting equilibrium in a competitive factor assignment help.
Actual practice of the concept of equilibrium
In the practical world, companies actually put a thorough check and determine the factors and aspects that are needed to get equilibrium and then plan their business commitments accordingly. The proper analysis of several structures of the market is necessary in order to determine the point of equilibrium. A thorough knowledge of perfect and imperfect forms of competition is necessary for understanding equilibrium which can be done by visiting equilibrium in a competitive factor homework help.
Equilibrium when the competition is perfect in nature
When the competition is perfect in a factor market, the firm cannot alter the cost of any production factor by decreasing or increasing the consumption of the factor. This results due to the fact that the amount of a factor that the firm requires is very little when compared to the factor’s demand in the market. Thus increasing the use of the factor by a firm will not affect the price of the factor.
Equilibrium when the competition is imperfect in nature
In practical world, the competition cannot be perfect. At times there is a single buyer for a particular production factor whereas there are several buyers. On such a case the single buyer can regulate the cost of a factor due to the competition from the seller market. Understanding the types of competition is very important that can be done by visiting equilibrium in a competitive factor assignment help.
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