The market of perfect competition. Its concept and essence

Market economy can be called a complex system that unites financial, industrial, information, legal and commercial organizations. All of them can be characterized by one concept - the market. This is the place where there are consumers who have a demand for a certain category of goods at a certain price, and producers that can offer a certain amount of goods at this price. The market allows you to set prices and sales volumes.

The determining factor of market relations is competition. This is a certain relationship between producers, as a result of which prices and volumes of products sold are established. There is also competition between consumers, which also affects these indicators. Competitive struggle is an indispensable condition for the formation of market relations.

There are different types of the market, depending on the type of competition.

The market of perfect competition is a model of market relations, which is considered ideal. At the same time, there are no restrictions that limit the development of the market.

The market of perfect competition has both positive and negative points. Its signs are:

1. A large number of sellers who do not affect the overall market situation, due to a small share in sales. Also there is a large number of consumers. This is an automated market.

2. There are no restrictions at the entrance to the industry that delivers goods to this market, as well as free movement of resources from one object to another.

3. Absence of heterogeneity of goods. That is, there are no brands, brands, etc. on the market.

4. The market for perfect competition is distinguished by the inability of sellers or consumers to influence the price level. The cost of goods is set spontaneously. Other market participants also can not influence pricing.

The market of perfect competition is open to all participants. Auxiliary factors, for example, promotions, do not have a significant impact on the level of sales. This is due to the fact that the products presented are homogeneous. The market is absolutely transparent.

This market has a clearly defined value - the value of the goods.

In this regard, the market of perfect competition forms a certain model of participants' behavior. They can be presented in several variants.

The first option is the price acceptor. All market participants have full and open information about the value of the goods. None of the participants has no influence on the formation of the price. If the seller overstates the price, then the buyers go to his competitors. If the price is too low, then the seller will not be able to meet the full demand.

The second option, which is present in the market with perfect competition, is the quantity regulator. Each seller in connection with the openness of the market can regulate the amount of goods sold.

Summarizing the above, it can be noted that the labor market in conditions of perfect competition is also considered more open and accessible. Each participant has the right to choose the most suitable conditions that are equal for all.

However, such a market model is rare. In general, imperfect competition prevails , in which not all participants have equal opportunities. With such an organization, the appearance of a monopoly is likely. Some market participants have the opportunity to influence the value of goods or services.

This is what distinguishes the market of perfect and imperfect competition from each other. Basically, this inequality of opportunities, the impact on the price of market participants, unfree access to the market and unfair competition.