Final Answer:
Characteristics of a new organization involve flexibility, innovation, adaptability, and a focus on growth.
A perfectly competitive market comprises numerous small firms with identical products and no market power.
Fixed costs remain constant regardless of output, while variable costs fluctuate with production levels.
The elasticity of demand varies with market structure, with perfectly competitive markets often exhibiting perfectly elastic demand due to easy substitution between products.
Step-by-step explanation:
New organizations typically embody flexibility, innovation, adaptability, and a growth-centric approach. They're often agile in responding to market changes, employ innovative strategies, and prioritize growth over stability. These entities are more prone to taking risks, experimenting with new ideas, and swiftly adapting to customer needs or market dynamics, setting them apart from more established, rigid organizations.
In a perfectly competitive market, there's a multitude of small firms offering identical products with no market power to influence prices. This market structure fosters healthy competition, with no individual firm having the ability to dictate prices. Consequently, these firms act as price takers, focusing on maximizing efficiency to remain competitive within the market.
Fixed costs refer to expenses that remain constant irrespective of the production volume, such as rent or machinery. On the contrary, variable costs fluctuate based on production levels, including raw materials or labor costs. Understanding these cost structures is crucial for businesses in making decisions related to pricing, production, and profit margins.
The relationship between elasticity of demand and market structure signifies how demand responsiveness varies across different market types. In perfectly competitive markets, where numerous substitutes are available, demand tends to be highly elastic as consumers can easily switch between identical products based on price changes. Conversely, in markets with monopolies or limited substitutes, demand elasticity might be lower due to fewer alternatives, leading to a lesser change in quantity demanded in response to price fluctuations.