SENIOR HIGH SCHOOL Applied Economics Market Structure: Perfect Competition Self-Learning Module

13 666 Quarter 3 Applied Economics Quarter 3 – Self-Learning Module 13: Market Structure: Perfect
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seek permission to use these materials from their respective copyright owners. The publisher and
authors do not represent nor claim ownership over them. Published by the Department of Education -
Schools Division of Pasig City Printed in the Philippines by Department of Education – Schools Division of
Pasig City Development Team of the Self-Learning Module Writer: Emmanuel B. Penetrante Editor: Edna
D. Camarao, PhD Reviewers: Content/Language: Edna D. Camarao, PhD, Dennis T. Alex, Hedelita B.
Calonia Technical: Emmanuel B. Penetrante Illustrator: Name Layout Artist: Name Management Team:
Ma. Evalou Concepcion A. Agustin OIC-Schools Division Superintendent Aurelio G. Alfonso EdD OIC-
Assistant Schools Division Superintendent Victor M. Javeña EdD Chief, School Governance and
Operations Division and OIC-Chief, Curriculum Implementation Division Education Program Supervisors
Librada L. Agon EdD (EPP/TLE/TVL/TVE) Liza A. Alvarez (Science/STEM/SSP) Bernard R. Balitao
(AP/HUMSS) Joselito E. Calios (English/SPFL/GAS) Norlyn D. Conde EdD
(MAPEH/SPA/SPS/HOPE/A&D/Sports) Wilma Q. Del Rosario (LRMS/ADM) Ma. Teresita E. Herrera EdD
(Filipino/GAS/Piling Larang) Perlita M. Ignacio PhD (EsP) Dulce O. Santos PhD (Kindergarten/MTB-MLE)
Teresita P. Tagulao EdD (Mathematics/ABM) Applied Economics SENIOR HIGH SCHOOL Market
Structure: Perfect Competition Quarter 3 Self-Learning Module 13 Introductory Message For the
facilitator: Welcome to the Senior High School – Applied Economics Self Learning Module on Market
Structure: Perfect Competition! This Self-Learning Module was collaboratively designed, developed and
reviewed by educators from the Schools Division Office of Pasig City headed by its Officer-in-Charge
Schools Division Superintendent, Ma. Evalou Concepcion A. Agustin, in partnership with the City
Government of Pasig through its mayor, Honorable Victor Ma. Regis N. Sotto. The writers utilized the
standards set by the K to 12 Curriculum using the Most Essential Learning Competencies (MELC) in
developing this instructional resource. This learning material hopes to engage the learners in guided and
independent learning activities at their own pace and time. Further, this also aims to help learners
acquire the needed 21st century skills especially the 5 Cs, namely: Communication, Collaboration,
Creativity, Critical Thinking, and Character while taking into consideration their needs and
circumstances. In addition to the material in the main text, you will also see this box in the body of the
module: As a facilitator you are expected to orient the learners on how to use this module. You also
need to keep track of the learners' progress while allowing them to manage their own learning.
Moreover, you are expected to encourage and assist the learners as they do the tasks included in the
module. Notes to the Teacher This contains helpful tips or strategies that will help you in guiding the
learners. For the learner: Welcome to the Applied Economics Self Learning Module on Market Structure:
Perfect Competition! This module was designed to provide you with fun and meaningful opportunities
for guided and independent learning at your own pace and time. You will be enabled to process the
contents of the learning material while being an active learner. This module has the following parts and
corresponding icons: Expectations - This points to the set of knowledge and skills that you will learn after
completing the module. Pretest - This measures your prior knowledge about the lesson at hand. Recap -
This part of the module provides a review of concepts and skills that you already know about a previous
lesson. Lesson - This section discusses the topic in the module. Activities - This is a set of activities that
you need to perform. Wrap-Up - This section summarizes the concepts and application of the lesson.
Valuing - This part integrates a desirable moral value in the lesson. Posttest - This measures how much
you have learned from the entire module. After going through this module, you are expected to: 1.
define perfect competition; 2. describe the characteristics of perfect competition; and 3. determine the
pricing power of perfect competition. Directions: Read each statement carefully. Choose the letter of the
best answer and write it on a separate sheet of paper. 1. It refers to the competitive environment in
which buyers and sellers operate. A. Market Structure B. Competition C. Perfect Competition D. None of
the above 2. It is the rivalry between companies selling similar products and services to revenue, profit,
and market share growth. A. Perfect Competition B. Market Structure C. Competition D. None of the
above 3. It is a type of market structure in which products are categorized as homogeneous. A.
Competition B. Market Structure C. Perfect Competition D. None of the above EXPECTATIONS PRETEST
4. The price taker in perfect competition. A. Seller B. Buyer C. Market demand and supply D. None of the
above 5. A price maker in the perfect competition. A. Seller B. Buyer C. Market demand and supply D.
None of the above Directions: Define the following terms. Write your answer in the space provided. 1.
Elasticity-_____________________________________________________________________
______________________________________________________________________________. 2.
Inelastic- _____________________________________________________________________
______________________________________________________________________________. 3.
Elastic- ______________________________________________________________________
______________________________________________________________________________. 4. Price
Elasticity-________________________________________________________________
______________________________________________________________________________. 5.
Income Elasticity-_____________________________________________________________
______________________________________________________________________________. RECAP
We have learned that the interaction of sellers and buyers is one of the concerns in microeconomics.
Hence, as a business student, you have to understand the behavior of these players in the market. We
define “market” as a place where buyers and sellers can meet to facilitate the exchange or transaction
of goods and services (Kenton, 2020). Market offers various products, however, not all products are
available in a single market. The type of products available varies on the market structure. Market
structure refers to the competitive environment in which buyers and sellers operate. The degree of
competition, it is rivalry among various sellers in the market, differs from the characteristics of the
market. It depends on the number and size of buyers and sellers, type of product bought and sold,
degree of mobility of resources, entry and exit of firms, and pricing powers. This module will help you
understand one of the market structures which is the perfect competition. Perfect or Pure Competition
A perfectly competitive market is a hypothetical market where competition is at its greatest possible
level. Many firms competing in the market, each of them is selling a product that is indistinguishable
from other products. Characteristics of Perfect or Pure Competition 1. There are so many buyers and
sellers that each has a negligible impact on market price. The change in the output of a single firm will
not noticeably affect the market price of the good. Likewise, there is no single buyer who can influence
the price since the consumer purchases only a small amount or in retail. 2. The products sold in the
market are homogenous. It means that the products are highly similar in such a way consumers have no
preference to buy from the other seller. The goods offered for sale are all the same. For example, the
salt is the same rock salt that the other store sells. Most of the products sell in perfect competition are
agricultural products. 3. Perfect mobility of resources refers to the easy transfer of resources in terms of
use or terms of geographical mobility. 4. There is perfect knowledge of economic agents of market
conditions such as present and future prices, costs, and economic opportunities. 5. The firms can easily
enter or exit from the market because there are no significant barriers or special costs to discourage the
new entrants. Likewise, there LESSON are no barriers that will prevent sellers from exiting the market.
Hence, firms need less capital to enter in the market. 6. Market price and quantity of output are
determined exclusively by forces of demand and supply. The seller is a price taker and has to follow the
market price in selling the goods. Activity 1: Describe the Market Directions: Complete the table by
providing the characteristics of perfect competition. Activity 2: Market Structure Directions: Illustrate a
real-world scenario of a perfect competition that is evident in your community. You may use the space
below. Number of Sellers Types of products Entry/exit to market Pricing power ACTIVITIES To summarize
what you have learned in the lesson, answer the following questions: 1. What is perfect competition? 2.
What are the characteristics of perfect competition? 3. Who determines the price in perfect
competition? Reflect on this! “I have been up against tough competition all my life. I wouldn’t know how
to get along without it” – Walt Disney Directions: Read each statement carefully. Write T if the
statement is correct, otherwise write F. ____________1. There are no barriers to entry into or exit out
of the market in a perfect competition. ____________2. In a perfect competition, the firms sell
heterogeneous products. ____________3. There are very many firms in the market. ____________4.
Buyers are the price takers in the market. WRAP-UP VALUING POSTTEST ____________5. There is
perfect knowledge, with no information failure or time lags in the flow of information. References Dinio,
R. and Villalis, G. Applied Economics. Rex Book Store, Inc. Sampaloc, Manila, 2017. Hayes, Adam.
"Understanding Perfect Competition." Investopedia. July 09, 2020. Accessed July 28, 2020.
https://www.investopedia.com/terms/p/perfectcompetition.asp. Kenton, Will. "What Everyone Should
Know About Markets." Investopedia. April 07, 2020. Accessed July 28, 2020.
https://www.investopedia.com/terms/m/market.asp#:~:text=A market is a place where buyers and
sellers can,transaction of goods and services. "Perfect Competition." Economics Online. January 20,
2020. Accessed July 28, 2020.https://www.economicsonline.co.uk/Business_economics/Perfect_co
mpetition.html. "TOP 19 TOUGH COMPETITION QUOTES: A-Z Quotes." A. Accessed July 28, 2020.
https://www.azquotes.com/quotes/topics/tough-competition.html. POSTTEST: 1. T 2. F 3. T 4. F 5. T KEY
TO CORRECTION PRETEST A 1. C 2. C 3. A 4. C 5