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Hello everyone.
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Now i'm going to talk about auctions and perfect competition and how they are different and similar.
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And i'm going to start with similarities.
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And the first way of how they are similar is there are many buyers.
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So in auctions, what happens is the seller puts down a price and asking price and then bidders bid at that price above.
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And it is sold to the person who bids the highest price.
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So this prevents prices being actually lower than the value of the product if there were a few sellers because let's say a few buyers, i'm sorry, because let's say if there were only a few buyers, then they could just bid a low amount and then they could just bid a low amount and then and then it would still be sold to the person who bid the highest amount.
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And a second reason how these two are similar is that buyers have no cost of entry.
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And a good example of this is online auctions like ebay...