perfect competition

Noun

Meaning

perfect competition (uncountable)

(economics) A theoretical type of market structure, where there are many firms providing homogeneous goods or services, resulting in allocative and productive efficiency in the long run.

Examples

Perfect competition must hold in product and factor markets, and also (and importantly) in capital markets. The assumption has two essential features: economic agents must be price takers; and they must have equal power. Nicholas Barr

Given the presence of this deadweight loss, the combined surplus (or wealth) for the monopolist and consumers is necessarily less than the total surplus obtained by consumers by perfect competition. Source: Internet

It is the point where the LRATC curve "begins to bottom out." citation Socially undesirable aspects compared to perfect competition * Selling costs: Products under monopolistic competition are spending huge amounts on advertising and publicity. Source: Internet

Economic profit does not occur in perfect competition in long run equilibrium; if it did, there would be an incentive for new firms to enter the industry, aided by a lack of barriers to entry until there was no longer any economic profit. Source: Internet

Here the acceptance or denial of perfect competition in labour markets does make a big difference to the view of the working of market economies. Source: Internet

In that matter, it is similar to the perfect competition model sometimes used in economics. Source: Internet

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