The essence of perfect competition
Posted: Thu Jan 23, 2025 4:24 am
The markets for certain types of agricultural products, as well as the stock exchange market, correspond most closely to the model of perfect competition.
Imperfect competition is characterized by greece telegram number database the fact that it violates the absolute equality of economic entities, and which of them can influence the market - up to a monopoly, where there is one producer who can dictate the price to buyers.
Modern legislation counteracts market monopolization and protects the interests of consumers - in our country, the federal antimonopoly service has powers in this area. For example, a conspiracy of several manufacturers regarding a general price increase is interpreted as a violation of antimonopoly regulations.
Perfect competition is based on the fact that the equilibrium price is established by the natural mechanisms of the market economy - none of the individual market participants has the power to influence it.
For example, if production increases and demand remains the same, the market becomes oversaturated with goods, and in order to sell them, producers are forced to lower prices. Similarly, an increase in demand with an unchanged supply volume pushes prices up.
Imperfect competition is characterized by greece telegram number database the fact that it violates the absolute equality of economic entities, and which of them can influence the market - up to a monopoly, where there is one producer who can dictate the price to buyers.
Modern legislation counteracts market monopolization and protects the interests of consumers - in our country, the federal antimonopoly service has powers in this area. For example, a conspiracy of several manufacturers regarding a general price increase is interpreted as a violation of antimonopoly regulations.
Perfect competition is based on the fact that the equilibrium price is established by the natural mechanisms of the market economy - none of the individual market participants has the power to influence it.
For example, if production increases and demand remains the same, the market becomes oversaturated with goods, and in order to sell them, producers are forced to lower prices. Similarly, an increase in demand with an unchanged supply volume pushes prices up.