Perfect Competition

Perfect competition is an economic model of a market structure where all participants have perfect knowledge of the market, no barriers to entry or exit, and all products are homogenous. This type of market structure is considered to be the most efficient and is often used as a benchmark for comparison when analyzing other market structures. In perfect competition, firms are price takers, meaning they cannot influence the price of the product they are selling. This is because the price of the product is determined by the market forces of supply and demand.

History of Perfect Competition

The concept of perfect competition was first developed by English economist Alfred Marshall in his 1890 book Principles of Economics. Marshall argued that perfect competition was the most efficient market structure, and that it would lead to the most efficient allocation of resources. He also argued that perfect competition would lead to the lowest possible prices for consumers. Since then, the concept of perfect competition has been widely accepted and used as a benchmark for comparison when analyzing other market structures.

Comparison Table

Summary

Perfect competition is an economic model of a market structure where all participants have perfect knowledge of the market, no barriers to entry or exit, and all products are homogenous. This type of market structure is considered to be the most efficient and is often used as a benchmark for comparison when analyzing other market structures. In perfect competition, firms are price takers, meaning they cannot influence the price of the product they are selling. For more information about perfect competition, you can visit websites such as Investopedia, The Balance, and Economics Online.

See Also

• Monopoly
• Oligopoly
• Monopolistic Competition
• Duopoly
• Supply and Demand
• Price Discrimination
• Price Elasticity
• Marginal Cost
• Marginal Revenue
• Game Theory

Do you like the post? Share it now: