Competition among buyers and sellers is a control
Illustrate Competition among buyers and sellers is a controlling mechanism?
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1. Large numbers of sellers mean that no single producer or seller can control the price or market supply.
2. Large number of buyers means that no single consumer or employer can control the price or market demand.
3. Depending upon market situation, manufacturers can enter and leave industry easily.
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Cost of debt= (1-tax rate)* interest rate * (debt ÷capital employed)Cost of equity = risk free rate + market premium (equity shareholders funds÷ capital employed)
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