Perfect Competition in Lead Mining Industry
Question 1
Perfect knowledge
There is perfect knowledge, with no information failure or time lags. Knowledge is freely available to all participants, which means that risk-taking is minimal. Consumers have all readily available information about prices and products from competing suppliers and can access this for free which means there are few transactions costs involved in searching for the required information about prices.
Homogenous products
Homogenous products basically means identical products. Consumers have no preference for a product from one firm over another. The products of each firm are perfect substitutes for one another. There is no difference in quality. Consumers would always choose to purchase the product with the lowest price. Firms cannot differentiate products in any way, including packaging or advertising.
Large number of sellers
In a perfect competition market, each seller represents a very small portion of the overall market. Since supply and demand in the overall market set the equilibrium price and quantity, one small firm cannot influence the market price. Each firm must accept whatever market price exists.
Price taker
Price taker is a huge advantage to consumers. This means that the producers has no control over the price which is determined by the market. Hence, consumers will always pay at the lowest price for the goods since the producers produces at the minimum price on the average cost curve.
Question 2
Productivity
Many experts agree the largest issue facing in mining is productivity. With most of the easily-accessible high grade ores almost tapped out, companies are faced with the challenge of either mining low grade ore or mining in remote regions.
In the case of low grade ore, miners must monitor the incoming material to maximize the extraction process and the waste material must be monitored just as closely to ensure that none of the valuable minerals are lost.
The higher grade ores that are still
Perfect knowledge
There is perfect knowledge, with no information failure or time lags. Knowledge is freely available to all participants, which means that risk-taking is minimal. Consumers have all readily available information about prices and products from competing suppliers and can access this for free which means there are few transactions costs involved in searching for the required information about prices.
Homogenous products
Homogenous products basically means identical products. Consumers have no preference for a product from one firm over another. The products of each firm are perfect substitutes for one another. There is no difference in quality. Consumers would always choose to purchase the product with the lowest price. Firms cannot differentiate products in any way, including packaging or advertising.
Large number of sellers
In a perfect competition market, each seller represents a very small portion of the overall market. Since supply and demand in the overall market set the equilibrium price and quantity, one small firm cannot influence the market price. Each firm must accept whatever market price exists.
Price taker
Price taker is a huge advantage to consumers. This means that the producers has no control over the price which is determined by the market. Hence, consumers will always pay at the lowest price for the goods since the producers produces at the minimum price on the average cost curve.
Question 2
Productivity
Many experts agree the largest issue facing in mining is productivity. With most of the easily-accessible high grade ores almost tapped out, companies are faced with the challenge of either mining low grade ore or mining in remote regions.
In the case of low grade ore, miners must monitor the incoming material to maximize the extraction process and the waste material must be monitored just as closely to ensure that none of the valuable minerals are lost.
The higher grade ores that are still