uh I'm going to continue from lesson number 59 and uh in this lesson um we are going to look at perfect market now if you remember in the previous lesson um I gave you the classification in which Market structures are distinguished so today I'm going in detail with one of the four and so now I'm answering you uh is um what are the number of firms what is the nature of product uh can is collusion possible and so on so let's have a look okay a perfectly competitive market is the market structure that has many buyers and sellers let's put it that way and maybe uh to Define it also I can say it's a market structure with many buyers and S sellers selling um a homogeneous product I think if I mention that in the definition anyone can tell I'm talking about a perfectly competitive market now the number of firms let's have a look there are so many firms in a perfectly competitive market so here I can maybe start giving you examples uh how many farmers are in South Africa so they are in a perfectly competitive market you see that there are so many farmers any uh okay not any because in some cases there can be many firms but it's not a perfectly competitive market so for you to be able to tell uh which one is which uh you'll have to look at other criteria okay for instance if I say to you uh there have let's say there are four people and amongst those four people we have three girls and one boy if I say to you he stole my pencil uh amongst the four which one stole the pencil obviously you can see it's the boy and why am I saying that because I said he and so you used gender as a criteria to get the answer now in some cases what if I say she stole my pencil do you see that that single uh criteria of gender does not tell you who it probably just tells you who didn't so any of the three could have stolen the pencil so in this case you have to go deeper and describe the person that stole the pencil then maybe you say the person was wearing a jacket and if only one person that is wearing a jacket then you say oh so it's that one okay the reason I'm saying this is in an exam they can give you a graph they can give you an extract ask you to read and then ask you uh can you identify the market structure in the above scenario now don't just use one criteria and say oh there are many firms in there so it's perfect because it could be something else cuz perfect is not the only Market structure with many buyers and sellers there's another Market structure that we'll talk about in the next topic uh which has many buyers and sellers so you see that don't jump into responding go deeper and try to see if uh there's other criteria in the extract that give you clue as to which Market structure they're talking about all right the next one is uh the nature of product right I started with uh farming and let me give an apple as an example uh I'll say apple is a homogeneous product and or we can say it's a standardized product yes we have green ones yes we have uh different colors some look yellowish and so on but the green ones they are all homogeneous and yes some are bigger some are smaller and so on but if I bring you nine apples from each province here in South Africa and ask you to take a bite can you tell me this one limo this one kzn this one Howen this one Eastern cake obviously you cannot tell why because they are homogeneous but if we look at some other product you can take a bite uh or a sip and you for those who drink alcohol you can sep and tell this is whatever those of you who drink juice you can tell this is that brand or whatever take a bite on chicken you can tell this is nandos this is KFC why why because those products are not homogeneous they are heterogeneous remember what we said in the previous lesson right the next one is uh freedom of Entry here we are saying uh can a firm enter uh or how easy is a firm is it for a firm to enter into this Market structure now in this case in a perfectly competitive market entry is absolutely free and easy so in other words if you want to start selling apples you can do it anytime and uh you you when you want to exit the market you can just eat your apples and go home you've exited the market right the next one I mentioned um collusion in the previous um okay there's a bit of noise from outside okay right the next one I mentioned collusion earlier I said collusion can either be possible or impossible now if Farmers think about Farmers how can they collude there are way too many uh someone will start a WhatsApp group start adding Farmers as you busy adding them mangu left and now mangu has left the group and we still want to collude so you will see that collusion in this market structure is very difficult and you can't even get you know in Conta with all Farmers cuz look you want to collude and you want to change the price it's difficult for firms to collude even if they were two they are not allowed to do so okay so so what then determines the price demand and Supply okay the next one is information uh if we look at a perfectly competitive market information is complete I said information can either be complete or incomplete okay uh we know uh we all know how to make let's say maze you just take the seed put it in the ground wait for and you do it in the right season and then it germinates it grows we Harvest we that that's how we make Maze and um we are all making the same Maze We Are planting it from the same seed so Farm a and farmer B will have the same type of maze cuz they're using the same seed okay the next next one is control over price no firm can control price they are all price takers remember I mentioned in previous lesson that a firm can either be a price maker or a price taker so if you want to sell maze if you want to sell apples you cannot sell at your own price you have to be a price taker right and what if apples are selling at 2 R then you try to sell yours at 3 rent people want buy from you because they have perfect information if I go back information is complete so you have no control over price cuz firms have perfect information they know that they can get the same apples from the previous uh uh uh uh business the next one is demand curve and uh you will see when we start explaining the graphs in future lessons uh we'll go in detail but for now just know that the demand curve is horizontal so the demand curve is just horizontal or in other words we can say it's perfectly elastic and we did elasticity of demand elasticity of supply in grade 11 so I'm not going to go into detail at the moment okay in the long run a perfectly competitive market remember I said Can a firm can either make economic profit or normal profit so a perfect Market can a business in a perfect Market cannot make economic profit in the long run they can only make normal profit and the reason is um entry is free so because of that when uh new firms enter Supply shifts and that causes price to drop to the point that firms only make normal profit okay and and then those that then start making economic loss they now decide should they continue or exit the market and again we are going to explain in future lessons uh the rule of shutting down and you'll see we'll be talking about something else there average variable cost the next one is decision making uh decision making in this case can uh is is um cannot decision making by A Perfect competitor does not have influence on other firms okay then uh a firm in a perfect Market can achieve productive efficiency and a firm can also achieve allocative efficiency and here we of examples I've been mentioning Farmers for Maze Tomatoes all that stuff okay so this brings us to the end of this lesson number 60 and again I'll give you an activity um which says with reference to the number of buyers and sellers in perfectly competitive markets explain where the market power exists so here this question just wants you to say does a firm have Market power is the JSC an example of a perfectly competitive market and motivate your answer all right thank you so much uh I'll see you in the next lesson