PERFECT COMPETITION
The theoretical free-market situation in which the following conditions are met:
(1) there are too many buyers and sellers which are all too small to have any degree of individual control over prices
(2) all buyers and sellers seek to maximize their profit (income)
(3) buyers and seller can freely enter or leave the market
(4) all buyers and sellers have access to information regarding availability, prices, and quality of goods being traded.
Also called perfect market or pure competition.
IMPERFECT COMPETITION
Conditions that help cause imperfect competition include
(1) restricted flow of information on costs and prices
(2) near monopoly power of some suppliers
(3) collusion among sellers to keep prices high
(4) discrimination by sellers among buyers on the basis of their buying power.
No comments:
Post a Comment