Improving production, reducing production costs, automation of all processes, optimize the structure of enterprises - all this is an important condition for the development of modern business.What best can force businesses to do it all?Only the market.
Under the market meant that the competition that occurs between the companies that produce or sell similar products.If there is a high level of healthy competition, for the existence of such a market need to continuously improve product quality and reduce overall costs.
concept of perfect competition
Perfect competition, examples of which are given in the article, it is the antithesis of monopoly.That is such a market, which operates an unlimited number of sellers who are engaged in the same or similar goods and thus can not influence the price.
The state should not influence the market or to engage his full control, as this may affect the number of sellers, as well as the volume of products on the market that is immediately displayed on the price per unit of goods.
Despite the seemingly ideal conditions for doing business, many experts are inclined to believe that in real terms the market will not exist for long perfect competition.Examples that confirm their words, in history occurred repeatedly.In the final result, the market became a oligopoly, or any other form of imperfect competition.
Perfect competition may lead to a decline
This is due to the fact that in the long run continuously decrease prices.And if the human resource in the world is large, that's technology is very limited.And sooner or later, the company will move to what will be upgraded all the fixed assets and all production processes, and the price will still fall due to the attempts of competitors to win a bigger market.
And it is lead to the operation on the brink of break-even point or under it.Save the situation can only have influence outside of the market.
main features of perfect competition
can identify the following features, which must have a market of perfect competition:
- a large number of sellers or producers.That is all the demand, which is in the market, should not be covered by one or more undertakings as in the case of monopolies and oligopolies;
- products in this market must be either homogeneous or interchangeable.It is understood that the sellers or manufacturers produce a product that can be fully replaced by products from other market participants;
- prices are only set by the market and depend on supply and demand.Pricing shall not affect neither the state nor the specific vendors or manufacturers.The price of the goods is to determine the cost of production, the level of demand and supply;
- there should be no barriers to exit or enter the market of perfect competition.Examples can be a variety of small businesses, where there are special requirements and do not need special licenses: studio, shoe repair services, etc .;
- there should be no other effects on the market from outside.
Perfect competition is extremely rare
In the real world you can not give examples of firms of perfect competition as a market that operates on such rules, is not there.There are segments that are as close as possible to its terms.
To find such examples, it is necessary to find those markets in which mostly operates a small business.If the market where it operates, you can enter any company, as well as easy to get out of it, it is a sign of a competition.
Examples of perfect and imperfect competition
Speaking of imperfect competition, the brighter it is the exclusive representative of the market.Companies that operate in these conditions, do not have any incentive to evolve and improve.
In addition, they produce such goods and provide services that can not be replaced by any other product.This explains the poorly controlled level of prices charged by non-market means.An example of such a market can be called a sector of the economy - oil and gas industry, and the company is the monopoly of "Gazprom".
example of perfect competition market is the provision of services to repair cars.Various stations and garages in the city and in other localities, there are many.The type and quantity of work performed almost the same everywhere.
is impossible in the legal field to artificially raise the price of the goods if the market is perfect competition.Examples supporting this claim, everyone has seen in his life many times in the regular market.If a vegetable seller raised the price of tomatoes for 10 rubles, despite the fact that their quality is the same as its competitors, the buyers will stop buying from him.
If monopolies monopolist can influence the price by increasing or reducing the sentence, in this case, these methods are not suitable.
With perfect competition can not raise the price of their own, as it may make the company a monopoly
Due to the large number of competitors in a price increase can not be, because all customers simply move to purchase goods from other relevant enterprises.Thus, the company may lose market share, which would entail irreversible consequences.
In addition, such markets have been falling commodity prices individual sellers.This is in an attempt to "recapture" the new market share to increase income.
And in order to reduce prices, you need to spend less raw materials and other resources to produce one unit of output.Such changes are only possible thanks to the introduction of new technologies, production optimization, and other processes that are able to reduce the cost of doing business.
market in Russia, which are close to perfect competition, are 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, developing a medium pace, but could be better.The main problem is the weak support from the state, as long as so many laws focused on specific support large manufacturers, which are often monopolies.In the meantime, the small business remains without special attention and the necessary funding.
Perfect competition, exemplified above, is the ideal form of competition by understanding the criteria of pricing, supply and demand.To date, none of the world economy can not find a market, which would correspond to all the requirements that must be observed under perfect competition.
