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
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