In analyzing the partial market, we implicitly assumed the model of perfect competition, which is one of the theoretically possible types of markets. The diversity of the latter dictates the need to study their originality.

In standard microtheory, the type of market structure is a type of competition between buyers and sellers. The structure of the market is determined primarily by the number and size of firms, the degree of product differentiation, the type of means of competition, and the ability to penetrate the industry. In accordance with this, it is customary to distinguish between a perfectly competitive market, a monopoly, an oligopoly and monopolistic competition.

Of course, the specified classification criteria (and this classification) of markets are not exhaustive. However, their use allows us to gain insight into possible options for the formation of supply and demand, competition, pricing and the effectiveness of interaction between buyers and sellers.

The subject of this chapter is the specificity of the set of relations (supply and demand, competition and pricing) that characterize the behavior of subjects of perfect competition.

8.1 Concept and conditions of perfect competition

A perfectly competitive market is a set of relationships between an infinitely large number of sellers and buyers, none of whom can individually influence the price of a commodity.

Perfect competition is possible in the presence of a number of conditions that allow us to determine the specifics of the functioning of this type of market; These conditions are thus signs of perfect competition:

the number of sellers and buyers in the market must be so large that none of them can arbitrarily influence the price (for each market participant the price is exogenous). In other words, when making decisions, each economic entity is forced to proceed from the price determined by the entire community (the totality of all individual actions), and cannot have an individual influence on pricing;

none of the buyers and sellers collude with each other;

the product offered by companies is simple (does not require complex manufacturing technology) and homogeneous (identical in its characteristics); at the same time, the product can be bought and sold in different quantities, and buyers have no reason (other than price) to prefer the product of any company to the product of another;

all market participants have comprehensive information about the market situation;

there are no entry barriers (obstacles to the entry of new firms into the market), which ensures unlimited mobility of economic resources;

there is no effect of scale (i.e., production capacities and costs of firms are the same); none of the firms has sufficient power to individually influence industry production and the price level;

buyers have the same monetary income;

There is no government regulation of the market.

These are the conditions for the functioning of a perfectly competitive market. In these circumstances, each buyer aims to maximize marginal utility, constrained by its budget, and each firm, constrained by technological capabilities, seeks to maximize (net) profit.

Introduction

The topic of this course work is “Features of a company’s behavior in conditions of modern competition. Typical methods of competition."

The main distinguishing feature that reveals the advantages of a market economy over a centrally planned economy is competition. It is precisely this that contributes to the progress of a market society and the forward movement of civilization.

Every truly competent economist knows that the more efficient the market is, the more it satisfies the conditions of perfect competition. Only in such a market do prices serve as reliable information about what, how, how much and for whom to produce.

Due to the fact that a real market economy is unthinkable without competition, there is an urgent need to study competition and the possible behavior of enterprises in its conditions, its level and intensity, methods of competition, knowledge of the strengths and market opportunities of the strongest competitors, prospects for competition in selected markets ,.

Consideration of the behavior of an enterprise in a perfectly competitive market and standard methods of competition is of interest, primarily because the very attitude towards the content of the term “competition” in the domestic economy has recently undergone a fundamental change. Competition and all the processes associated with it (demonopolization) are new for Ukraine and therefore their study is important and relevant for us.

Coursework objectives:

Consider the principles of the existence of a perfectly competitive market;

Analyze the characteristics of the behavior of a firm in a perfectly competitive market in short-term and long-term conditions.

Consider typical methods of competition.

Behavior of an enterprise in conditions of perfect competition

Conditions for the emergence of perfect competition

What are the conditions for the emergence of such a competitive environment and why does it most push firms to increase economic efficiency?

A market of perfect competition can be stable only if all the necessary conditions are present at the basis of its existence:

1. A large number of firms producing homogeneous products, and a small number of market entities. The smallness of market entities means that the supply (demand) volumes of even the largest sellers (buyers) are so small compared to the total volume of sales on the market that these entities cannot influence the market price.

Theoretically, the situation described above is, strictly speaking, impossible. Indeed, a shift in the individual supply curve of any producer will inevitably lead to some shift in the market (total) supply curve, which will cause a change in the equilibrium price. However, in real life, small firms usually do not influence the market price. To eliminate this contradiction, the smallness of market entities is interpreted as a situation in which the share of each firm in total sales is infinitely small, and the number of firms in the industry is infinitely large. Examples include agricultural markets, the stock exchange and the foreign exchange market.

A company that has its products in a competitive market is called a competitive company, because these firms cannot influence the price; they act as price takers (price takers).

2. Homogeneity of products from different enterprises, that is, there is no danger that consumers will generally prefer the products of one of the companies because of their striking superiority in properties or quality compared to the products of other companies. For example, the potato market is very likely to be competitive. Many farmers sell potatoes every day. None of them have more than 1% of the market's daily sales volume. If the share of one of them, due to additionally sold potatoes, increases to 2%, then this will not affect the market price in any way.

In terms of utility theory, product homogeneity means that products from different producers are completely interchangeable for each buyer, and the marginal rate of substitution of one product for another is equal to one. For example, replacing an orange from one manufacturer in a set with an orange from another manufacturer does not change the utility of the set. In this case, each buyer indifference curve is a straight line segment inclined to the coordinate axes at an angle of 45 0. In Fig. 1.1, the indifference curve for products from two different manufacturers is denoted by AB. X denotes the quantity in the product set of the first manufacturer, and Y the quantity of the second manufacturer.

In real life, absolutely homogeneous products are extremely rare (distilled water, shares of a corporation, a subway token). Oil, sugar, and tomatoes have a high degree of homogeneity. And we certainly cannot consider goods such as books, airline tickets, and toys to be homogeneous.

3. There are no entry barriers for a new manufacturer to enter the industry and the possibility of free exit from it. The entry barrier to entry into the industry may be:

E Availability of patents or licenses providing preferential rights to produce certain products (production of alcoholic beverages, export licensing);

Ё Relatively high costs required to organize production in the industry (heavy industry);

E Significant returns to scale of production, which provide advantages to large enterprises that have already benefited from expansion of production (natural monopolies);

Ё Attaching buyers to sellers (maintenance of a residential building by a certain utility service);

Ё Limitation of the mobility of production resources (registration rules for citizens often impede the free movement of labor resources between territorial labor markets).

Free entry and exit into an industry ensures that there is no agreement between producers operating in the industry to raise prices by reducing output. Any increase in prices can attract new firms into the industry, which will increase supply.

4. Equal access to all types of information (“market information transparency”). This means that all buyers have complete information about the characteristics of the product and its prices, and manufacturers have information about production technology and prices for production factors. If sellers have more information about the consumer properties of a product than buyers, then such a market is called a market with asymmetric information. An example is the medical services market, in which buyers (patients) cannot competently judge the quality of services provided to them, the degree of their need, and the correspondence of the quality of services to their price.

5. Perfect mobility. The buyer (seller) can instantly conclude a deal with any seller (buyer), and this does not require additional costs. Currently, perfect mobility of market participants is achieved when concluding transactions using a computer. In other cases, “switching” one buyer from one seller to another usually requires time and often travel costs. If there is perfect mobility and perfect information of market subjects, then a homogeneous product is sold at a single price.

6. Rational behavior of all participants pursuing their own interests. Collusion in any form is excluded.

7. The costs of firms for the production of goods do not differ very significantly due to the similarity of technology and prices for resources purchased for production. If this condition is not met and one of the firms has significantly lower production costs, then it will be able to easily upset the market equilibrium, for example, by offering goods at a lower price (inaccessible to other competitors) and thereby capturing a significantly larger market share than its competitors ( condition 1) will be violated.

7. Transport costs do not play a big role in the formation of supply, that is, there is no danger that many manufacturers will find themselves uncompetitive due to too expensive delivery of their goods to customers (their prices will ultimately be higher than those of competitors whose enterprises are located closer to the main sales markets).

7. Relevance. Pure competition is quite rare in practice. This does not mean, however, that competitive market analysis is an inappropriate logical exercise.

There are few industries that come closer to a competitive model than any other market structure. For example, many features of American agriculture are easier to understand if we know how competitive markets operate.

Pure competition is the simplest situation to which the concepts of “income” and “cost” are applicable. Pure competition provides a clear, multi-valued starting point for any discussion of pricing and output determination.

The operation of a pure competitive economy provides us with a template or standard against which to compare and by which the performance of a real economy can be judged. In short, pure competition is a market model that helps to understand and appreciate the meaning of the real economy

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2. What is product differentiation and what role does it play in shaping a monopolistic competition market?

Differentiation is the variety of a product; product differentiation leads to the fact that a single market breaks up into separate, relatively independent parts.

3. Describe the features of an oligopolistic market. What is the main barrier to entry into an oligopolistic industry?

It is a market dominated by a few large firms, i.e. a few sellers facing many buyers. Although there is no clear quantitative criterion for oligopoly, there are usually from three to ten firms in such a market.

The barrier to entry into the industry is ownership of non-renewable resources and monopoly access to sources of raw materials.

4. Explain the principle of choosing the optimal size of output under conditions of monopolistic competition.

The profit-maximizing output of QSR is determined by the intersection of the marginal revenue and marginal cost curves (MR=MC).

5. List the main types of oligopoly.

Uncoordinated oligopoly, Cartel (or collusion) of firms, Cartel-like market structure (or “playing by the rules”)

6. The inefficiency and losses for society associated with monopolistic competition are often emphasized:

the firm is not operating at the lowest point of its long-run average cost;

the gap between price and marginal costs, as in conditions of pure competition, means a certain “underproduction” of products;

reduction of a large number of small firms, since their presence on the market would lead to lower prices.

Do you have any arguments in defense of monopolistic competition?

Legal (lat. legalis - legal) monopolies formed on a legal basis. These include the following forms of monopolistic organizations: the patent system, copyrights, trademarks - all this protects our market from substandard goods.

• 7. What are the positive and negative consequences of market oligopolization?
• - large firms have significant financial opportunities for scientific developments and technical innovations;
• - competition between firms belonging to oligopolies contributes to the development of scientific and technological progress.
• - oligopolies are not so afraid of competitors, since it is almost impossible to penetrate the industry. Therefore, they are not always in a hurry to introduce new equipment and technologies;
• - by concluding secret agreements, oligopolies seek to benefit at the expense of buyers (for example, they increase prices for products), which reduces the level of satisfaction of people's needs;
• 8. What level of prices, output volumes and profits develop under the rule of cartels?

So, this whole thing is not much different from a similar task for a multi-factory company. First, in accordance with the MR=MC rule, the total production volume of the cartel as a whole is established, and MC is formed by horizontally summing all cartel participants. At point Qk the optimal production volume of the cartel is established. In accordance with the demand curve D, such a volume can be sold at a price Po. Now the selected volume needs to be distributed among the participants. Each participant must produce goods in a volume at which its marginal costs will be equal to the profit-maximizing level of marginal costs of the entire cartel. Qa and Qb are the corresponding volumes of firms and production levels for each cartel participant. Of course, each participant will produce as many products as needed to fulfill the rule

Thus, if we consider the cartel as a single whole, the described procedure is ideal, since 1) the cartel produces the optimal volume of products from the point of view of profit maximization; 2) distribution of this output among participants minimizes costs.

In short, the output of cartel members will always be equal to the cartel's optimal output. Moreover, with this method of quota distribution, the marginal costs of all its participants and the entire cartel are equal, i.e. condition is met

Typically, firms with different levels of costs join together in a cartel. Therefore, the profit of one company may be greater than that of another. In other words, when a cartel is created, some participants benefit more than others. Therefore, it is not profitable for firms with small profits to participate in the cartel, and in order to interest them, firms with large profits share in one form or another with those who are not interested.

9. What are syndicates? Describe the role of cartel agreements in Tsarist Russia and in modern conditions in our country.

Syndicates were common in Russia at the beginning of the century - associations of manufacturers who own a single subsidiary, which is the only seller of their products, that is, in fact, a monopolist. Since there is no direct collusion between oligopolists, only an agreement with society, antimonopoly legislation is powerless.

Cartels had a sharply negative impact on the Russian economy in the early 20th century. There was an increase in prices, an understatement of production volumes, a “hunger of goods”, a deliberate deterioration in the quality of products and a slowdown in technical progress. Cartels were banned in Tsarist Russia much earlier than in the West, which led to the emergence of syndicates. Due to legal prohibition, cartels do not exist in modern Russia, but the practice of one-time price collusion is very widespread, which leads to periodic shortages of certain goods. Often, various associations of manufacturers or importers try to carry out functions close to cartels.

10. What are the specific conditions of the monopolistic competition market?

A monopolistic competition market consists of many firms offering their goods at prices that fluctuate over a wide range. The presence of a wide range of prices is explained by the ability of sellers to offer customers different product options. The products are not completely interchangeable and differ from each other not only in physical characteristics, quality, design, but also in consumer preference. The differences between the products justify the wide range of prices. Buyers take into account the differences in offers and are willing to pay different prices for goods. To differentiate themselves beyond price, sellers seek to develop differentiated offerings for specific consumer segments and make extensive use of branding, advertising, and targeting of specific consumers or groups. An example of a monopolistic competition market is the production of clothing, soft drinks, washing powder, computing equipment, and computers. In a market of monopolistic competition, a company becomes, as it were, a “monopolist” of its brand of product. The monopolistic competition market has the following features: 1. Intense competition between firms. 2. Differentiation of goods produced by competing firms due to differences in properties and the provision of unequal additional services. 3. Ease of market penetration. The peculiarity of marketing in these conditions is to identify the specific needs of buyers of different market segments. In conditions of monopolistic competition, a company sets its price using a specific strategy. The most common strategy is geographic pricing, where a firm sells products to consumers in different parts of the country at different prices.

11. Describe the features of a monopolistic market. What barriers limit the access of new firms to it?

Peculiarities monopolistic market:

There is only one manufacturer on the market that supplies a product without close substitutes.

The monopolist is opposed by a large number of isolated consumers who individually do not influence the price

The monopolist is active in the market, the company chooses not only the volume of production, but also the price price-searcher, consumers are passive, forced to adapt to the price of the monopolist

The monopolist works with the demand curve of the entire industry i.e. sets the price so that all products are purchased by the consumer

In a monopoly market, the supply curve disappears, as the monopolist looks for price-volume options along the demand curve.

The main barriers existing in a monopolistic industry are:

Advantages of large-scale production up to natural monopoly

Legal barriers: monopoly ownership of sources of raw materials, land, rights to scientific and technical achievements, state-sanctioned exclusive rights, unfair competition.

12. Market equilibrium under monopoly conditions.

According to some estimates, about 75% of all enterprises in economically

developed countries compete in markets where sales functions under conditions of monopolistic competition. The competitive environment is filled with a large number of small and medium-sized enterprises, none of which have a significant share of total sales. The key competitive feature of such a market is the absence of widely known leaders who have a significant influence on the development of conditions and trends in the industry. This condition can be explained by economic and historical reasons:

• -low “entry” and “exit” barriers in the industry;
• -lack of economic feasibility of large scale

production due to the high degree of product differentiation, needs

buyers in individually manufactured goods, significant differences in markets located in different territories and other reasons that do not allow organizing mass large-scale production and achieving the economic effect on unit costs;

• -state regulation of business in order to maintain a high level of competition in the industry;
• - “youth” of the industry, when none of the enterprises has yet accumulated

experience and means to occupy a large market share.

a) short-term time interval | b) long-term period |

Some markets where monopolistic competition prevails

are consolidated as they develop. Fierce competition destroys weak, inefficient enterprises and leads to greater concentration of production in large, powerful companies. However, this does not always happen. Often, for economic reasons, enterprises are not able to destabilize the current situation due to the fact that none of them can radically change the above characteristics of the competitive environment.

In conditions of monopolistic competition, each enterprise, having achieved equality of marginal costs (MC) and marginal revenue (MR), can receive economic profit. However, in the future, other enterprises will appear on the profitable market. This partially reduces demand, thereby “lowering” the demand curve for each “old” firm. Their struggle to maintain their market share, as a rule, increases the costs of production and sales of products. The emergence of “new” enterprises will continue until a long-term equilibrium is established, reducing income

13. What is price discrimination? What types of it do you know?

Price discrimination is the setting of different prices for the same product sold to different buyers, or the setting of different prices for different units of the same product sold to the same buyer.

There are several types of price discrimination by degree:

• 1st degree: perfect discrimination: each unit of goods is sold to the individual who values ​​it highest, that is, the consumer pays the maximum price for him for the product; an abstract situation.
• 2nd degree: a monopolist sells a product at different prices, but everyone who buys the same number of units of the product pays the same price, that is, if you buy more, you pay less.
• 3rd degree: different prices are set for buyers with different levels of financial security.

In Russian conditions, both 2nd and 3rd degrees of discrimination are widespread. The 3rd degree of discrimination in Russia is clearly visible in the system of telephone tariffs: low-income citizens pay less than the majority, firms and organizations pay more. The second degree is even more common in modern conditions. Example: discounts in stores during a pre-New Year sale or at a company purchasing consumables for a product previously purchased there.

• 14. Do you agree with the statement: “A pure monopolist can raise the price of his product unlimitedly: after all, he is the only producer in the industry. The demand curve for his product is absolutely inelastic.” Do you agree with this statement
• 15. How is antimonopoly policy implemented in relation to natural and artificial (entrepreneurial) monopolies?

B. When characterizing the equilibrium of a monopolistic competitor firm in the long run, specifically justify the following points:

Can equilibrium under monopolistic competition be reached at the same point on the cost curve as under perfect competition (tangent to the minimum average total cost)?

Explain why monopolistic competition occurs only with a differentiated product, and oligopoly with both a differentiated and homogeneous product.

Which market is more monopolized? Compare two markets: market No. 1, in which there are three firms that control 50%, 40%, and 10% of production, and No. 2, in which there are firms that control 35%, 35%, and 30% of production.

	Rationale
The criterion for imperfect competition is: a) Horizontal demand curve, b) The small number of market entities, c) Downward sloping demand curve, d) Market monopolization	Market monopolization
2. In conditions of imperfect competition, an enterprise establishes: e) Maximum price, f) A price that provides an average (i.e. zero economic) profit, g) The price corresponding to the rule MR = MC, h) The maximum price allowed by government antimonopoly authorities.	The maximum price allowed by government antimonopoly authorities.
3. The features of monopolistic competition do NOT include: a) Product differentiation, b) Small number of producers, c) Low barriers to entry into the market, d) Imperfect information	Imperfect Information
4. Product differentiation factors do NOT include: a) Differences in quality, b) Differences in service, c) Differences in price,	Differences in service
5. Non-price competition is carried out: a) Based on the quality characteristics of the product, b) Using disguised discounts from the official price, c) Non-market ways (lobbying with government agencies, etc.), d) Through the purchase of shares and other methods of takeover.	Based on the quality characteristics of the product,
6. Which of the following areas is most characterized by an oligopolistic structure? Production and sale of clothing Agricultural production Automotive industry Housing construction f) Service sector	Automotive industry
7. Price inflexibility in an uncoordinated oligopoly is associated with: Conspiracy of oligopolists Inelasticity of demand Absolute inelasticity of demand f) Other reasons (specify)	The broken nature of the demand curve
8. A cartel-like market structure implies: Compliance by all competitors with unspoken rules Coordination of all actions of oligopolists Complete absence of any coordination of the actions of oligopolists Territorial division of markets f) Introduction of fixed production quotas for each company
9. The types of oligopoly do not include: Differentiated oligopoly Uncoordinated oligopoly Cartel-like market structure e) Everything applies	Everything applies
10. The most efficient allocation of resources can potentially ensure: Monopoly Monopolistic competition Perfect competition Oligopoly f) Imperfect competition
11. The features of a monopoly do not include: Sole manufacturer Product uniqueness Insurmountability of barriers Perfect Information e) All previous answers correspond to the features of a monopoly	Sole manufacturer
12. Unlike a company operating surrounded by competitors, a monopolist: Operates under conditions of completely inelastic demand Can set an arbitrarily high price Can set a profit-maximizing price e) Can, under any conditions, receive economic profit	Can fully control the volume of supply in the market
13. The firm is able to appropriate the entire consumer surplus if: Is the only producer (monopolist) Performs second degree price discrimination Performs third degree price discrimination e) Is a natural monopolist producing an absolutely irreplaceable product	Performs price discrimination of the first degree
14. Which of the following cannot be a reason for a firm's monopoly power? Patent law Explicit or implicit collusion between firms in a given industry State standards for environmental protection f) Import quotas	Number of firms in the industry market
15. Regulation of natural monopolies pursues all of the following goals, except: Price limit Increased production volume Establishing the amount of acceptable excess profits Setting prices at the level of average costs (AC) f) Setting prices that ensure normal profits	Setting prices that ensure normal profits.

Improving production, reducing production costs, automating all processes, optimizing the structure of enterprises - all this is an important condition for the development of modern business. What's the best way to get businesses to do all this? Only the market.

The market refers to the competition that arises between enterprises that produce or sell similar products. If there is a high level of healthy competition, then to exist in such a market it is necessary to constantly improve the quality of the product and reduce the level of overall costs.

The concept of perfect competition

Perfect competition, examples of which are given in the article, is the exact opposite of monopoly. That is, this is a market in which there is an unlimited number of sellers who deal in the same or similar goods and at the same time cannot influence its price.

At the same time, the state should not influence the market or engage in its full regulation, since this can affect the number of sellers, as well as the volume of products on the market, which is immediately reflected in the price per unit of goods.

Despite the seemingly ideal conditions for doing business, many experts are inclined to believe that, in real conditions, perfect competition will not be able to exist in the market for long. Examples that confirm their words have happened repeatedly in history. The end result was that the market became either an oligopoly or some other form of imperfect competition.

may lead to decline

This is due to the fact that prices are constantly decreasing. And if the human resource in the world is large, then the technological one is very limited. And sooner or later, enterprises will move to the point where all fixed assets and all production processes will be modernized, and the price will still fall due to competitors’ attempts to conquer a larger market.

And this will already lead to functioning on the verge of the break-even point or below it. The situation can only be saved by influence from outside the market.

Main features of perfect competition

We can distinguish the following features that a perfectly competitive market should have:

A large number of sellers or manufacturers of products. That is, the entire demand that exists on the market must be covered not by one or several enterprises, as in the case of a monopoly and oligopoly;

Products on such a market must be either homogeneous or interchangeable. It is understood that sellers or manufacturers produce a product that can be completely replaced by the products of other market participants;

Prices are set only by the market and depend on supply and demand. Neither the state nor specific sellers or manufacturers should influence pricing. The price of a product should be determined by the level of demand as well as supply;

There should be no barriers to entry or exit into a perfectly competitive market. Examples can be very different from the field of small business, where special requirements have not been created and special licenses are not needed: atelier, shoe repair services, etc.;

There should be no other external influences on the market.

Perfect competition is extremely rare

In the real world, it is impossible to give examples of perfectly competitive firms, since there is simply no market that functions according to such rules. There are segments that are as close as possible to its conditions.

To find such examples, it is necessary to find those markets in which small businesses mainly operate. If the market where it operates can be entered by any company and easily exited, then this is a sign of such competition.

Examples of perfect and imperfect competition

If we talk about imperfect competition, monopoly markets are its clear representative. Enterprises that operate in such conditions have no incentive to develop and improve.

In addition, they produce such goods and provide such services that cannot be replaced by any other product. This explains why it is poorly controlled and established through non-market means. An example of such a market is an entire sector of the economy - the oil and gas industry, and the monopoly company is OJSC Gazprom.

An example of a perfectly competitive market is the car repair industry. There are a lot of different service stations and auto repair shops both in the city and in other localities. The type and amount of work performed is almost the same everywhere.

It is impossible in the legal field to artificially increase prices for goods if there is perfect competition in the market. Everyone has seen examples confirming this statement more than once in their life on the regular market. If one vegetable seller raised the price of tomatoes by 10 rubles, despite the fact that their quality is the same as that of competitors, then buyers will stop buying from him.

If when can influence the price by increasing or decreasing supply, then in this case such methods are not suitable.

With perfect competition, you cannot independently increase the price, as a monopolist can do.

Due to the large number of competitors, it is impossible to simply increase the price, since all customers will simply switch to purchasing relevant goods from other enterprises. Thus, an enterprise may lose its market share, which will entail irreversible consequences.

In addition, in such markets there is a reduction in prices for goods by individual sellers. This occurs in an attempt to “win” new market shares to increase revenue levels.

And in order to reduce prices, it is necessary to spend less raw materials and other resources on the production of one unit of product. Such changes are possible only through the introduction of new technologies and other processes that can reduce the level of costs of doing business.

In Russia, markets that are close to perfect competition are not developing fast enough

If we talk about the domestic market, perfect competition in Russia, examples of which are found in almost all areas of small business, is developing at an average pace, but it could be better. The main problem is the weak support of the state, since so far many laws are aimed at supporting large manufacturers, who are often monopolists. In the meantime, the small business sector remains without special attention and the necessary financing.

Perfect competition, examples of which are given above, is an ideal form of competition from the understanding of pricing criteria, supply and demand. Today, in no other economy in the world can one find a market that meets all the requirements that must be met under perfect competition.