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Pure or perfect competition is rare in the real world, but the model is important because it helps analyze industries with characteristics similar to pure competition. This model provides a context in which to apply revenue and cost concepts developed in the previous lecture. Examples of this model are stock market and agricultural industries. The demand line in each production unit's attitude is due to the structure of the market. There are a lot of buyers and sellers, and each does not have the power to set the price of goods on the market. Prices are determined by supply and Demand of the market price and quantity which is cutting output balance of the item category.
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