Perfect Competition

Perfect competition Market

1. Price under perfect competition is determined by the industry not by an individual form
2. price under perfect competition is known as equilibrium price because it corresponds to
equilibrium of the industry.
3. An individual form under perfect competition cannot change the equilibrium price.
4. excess demand occurs when corresponding to the existing price demand for a
commodity is greater than its supply (D>S)
5. Excess supply occur when corresponding to the existing price supply of a commodity
is greater than its demand (S>D)

• Large number of buyers & sellers

• Information symmetry- A condition in which all relevant information is known to
all parties involved. For example, in the stock market, stock information has a full
public disclosure, and all investors are in the same position to share information.
• Low barriers in entry & exit
• Sub categorisation of products like Rent.com, Shopping.com, ShutHub
• Homogeneity of products
 • The Limit to the Supply
• C-C Service
• Entry & Exit
• Competitive Advertising And Generic Advertising
• Buyers and Sellers are Price Takers
• Economic Profit, Normal Profit And Abnormal Profit, Simple Profit
• Product Differentiation & Identical Products

Introduction to eBay
eBay is a place to buy sell and window shop.
1.eBay founded in September 1995 by Pierre Ombidyar which is a software developer, a
spin odd Apple Computers.
2.In Exhibit 1 Meg explained about the initial Public Offerings to people & different price
structure ,Like proposed offer price, Actual Offer price, First day Open, First day close,
Shares offers, Offering Amount (In millions) And underwriters.
3.Meg created an experienced mgmt. team by getting staff from companies like Pepsico
and Disney, Built strong vision. They started to connecting people.
4.eBay has three segments of business:-
• Marketplaces
• Payments
• Communications
5.In exhibit 2 they explain about revenue diversification in eBay and the mode in
increasing just only in three years from 33% to 49%.
The marketplace of eBay provides all the buyers and sellers to interact and trade globally
with everyone, can trade in the whole world from anywhere 24*7. This platform also
provides software tools & services and fully automated online websites which are cost
free. An online marketplace where you can buy things from all over the world without
leaving your home you can get things that you would never think anyone would bother to
sell and you can get them cheap. The powerful search engine means that you can find
things you will like without even knowing exactly what you are looking for.
6.Online commerce platform is eBay.com and local counterparts 39 countries. Rational
behaviour and the part of sellers and buyers.
Consisting of
• Half.com
• Rent.com
• Shopping.com
• StubHub
7.Revenue is generated from
• Fee paid for listing
• Fee paid for feature
• Fee paid for subscription
• Fee paid for final value
8.There are some other fess like:-
• Lead referral fee
• Transaction Fee
• Advertising Fee
These fee also a revenue for eBay.
9.Initially started with Auction style format then further move to Fixed Price Auction
Model due to obscure website Half.com have Fixed Price System become a potential
threat to Floating Price Auction Model.
10.eBay introduced fixed price option to its listing with items with a “BUY IT NOW”
logo which provides the facility of immediate purchase for set price.
11.eBay’s classified website
• Designed to help people meet
• Share ideas and trade on local level
12.Rent.com is concerned about rental housing industry which does a job to bring
together apartment seekers and managers.
13.Shopping.com which a shopping destination for users of thousands of merchants.
14.StubHub is US Ticket Marketplace which provides fans to buy all tickets for sports
and entertainment etc.
15.eBay Payments Segments PayPal allows everyone i.e. individuals and business owners
to send and receive their payments online.
16. For bargains eBay is an ideal place to buy.eBay is an American website which creates
a marketplace facilitating large scale trade of varied items cars, clothing, DVDs.
17.eBay communication have different segments:-
• Skype – Enables Voice over Internet Protocol Communications And low cost
connectivity.