Assumptions
- Commodity price is given and constant for the consumers.
- Consumers' taste and preferences, habits, incomes are also considered to be constant.
- Prices of prolific resources of a commodity and that of other related goods (substitute or complimentary) are known as well as #constant.
- Industry is easily availed with factors of production at a known and constant price compliant with the methods of production in use.
- Prices of the products that the factor of production helps in producing and the price and quantity of other factors are known and constant.
- There is perfect mobility of factors of production between occupation and places.
The above mentioned points relate to a perfectly competitive market but can be further extended to monopolistic competition, oligopoly, monopoly and monopsony markets.
Read more about this topic: Partial Equilibrium
Famous quotes containing the word assumptions:
“Unlike Boswell, whose Journals record a long and unrewarded search for a self, Johnson possessed a formidable one. His life in London—he arrived twenty-five years earlier than Boswell—turned out to be a long defense of the values of Augustan humanism against the pressures of other possibilities. In contrast to Boswell, Johnson possesses an identity not because he has gone in search of one, but because of his allegiance to a set of assumptions that he regards as objectively true.”
—Jeffrey Hart (b. 1930)
“Assumptions of male superiority are as widespread and deep rooted and every bit as crippling to the woman as the assumptions of white supremacy are to the Negro.... this is no more a man’s world than it is a white world.”
—Student Non-Violent Coordinating Committee, African American civil rights organization. SNCC Position Paper (Women in the Movement)
“What a man believes may be ascertained, not from his creed, but from the assumptions on which he habitually acts.”
—George Bernard Shaw (1856–1950)