Pure competition, which received the name of "perfect" is a constant confrontation, the struggle taking place in the market.Usually, it communicates a large number of firms that produce a uniform and standard products.In such circumstances, each company has the opportunity to go "out" because there is no control over prices.
market pure competition is characterized by the fact that none of his party does not affect the cost.The fact that the seller will not be able to ask higher prices approved, as in this case, buyers are able to buy it on their desired product from another vendor.Consider this situation in more detail.
Firstly, we are talking about what the market offers certain products, which are the same for all sellers.For example, rye, buyer is satisfied in any case, regardless of with whom he bought it.
Second, all participants have equal and full information about the state of the market, and therefore develops pure competition.
Third, their impact will not be able to influence this process.
Therefore, the market of perfect competition - it is a market in which there is a trend-setting the same value to the product at one particular time.
special arrangements for its functioning.Consider his work in more detail on the example of the acquisition of rye.So, if its value increases with increasing demand, the farmer is required to react to it with the help of the expansion of its plantation for the next year.For the same reason, so did other farmers who had not engaged in this, zaseivaya all large areas.Of course, the following year under favorable climatic conditions increase the supply of rye on the market.As a result, this will lead to a drop in market value.Therefore, all farmers, even those who did not expand the acreage under corn, will experience problems with the implementation, even at a low price.
Consequently, pure competition, and perfect, will be realized only if a series of laws will be respected.
Firstly, there is a huge number of participants of market relations and availability of the struggle between them.
Secondly, they each have free access to any activity within them.
Thirdly, it should be noted the absolute mobility of production factors and unrestricted freedom of movement in the capital.
Fourth, there must be full awareness of market participants on the rate of demand, profit, supply, sales and so on.
Fifth, the need to enforce the law of rational behavior of all market entities.
Sixth, uniformity is only permitted goods.There should be no marks, trade marks, brand names, and so on.
Seventh, there can be situations that a market participant has a direct and negative impact on other solutions using non-economic methods.
Eighth, pure competition allows the spontaneous assertion value.
Ninth, there should be no monopoly and the presence of only one manufacturer.
Tenth, monopsony is unacceptable, as is a single buyer, as well as government interference in its operation.
Considering dedicated laws, you can create an ideal market pure competition.
However, in reality the situation when all the necessary conditions are present, appear infrequently.The fact that there is no perfect and the free market, and most of them operate according to the laws established by the monopolistic competition.