Title: Market Forms: Pure Competition, Perfect Competition and Imperfect Competition
Headings: Market Forms: Pure Competition, Perfect Competition and Imperfect Competition
Market Forms: Pure Competition, Perfect Competition and Imperfect Competition
Read this article to learn about Pure Competition, Perfect Competition and Imperfect Competition!
1. Pure Competition:
Pure Competition is said to exist when the following two conditions are fulfilled:
(i) Large Number of Buyers and Sellers:
(ii) Homogeneous Product:
Diagrammatic Representation:
2. Perfect Competition:
The existence of the following conditions in a market will make it a perfect competition market:
(iii) Free Entry or Exit:
(iv) Perfect Knowledge:
(v) Absence of Transport Costs:
(vi) Perfect Mobility of the Factors of Production:
3. Imperfect Competition:
A. Monopolistic Competition:
The main features of monopolistic competi­tion are:
B. Duopoly:
C. Oligopoly:
Monopoly:
Classification of Market Forms:
The following chart shows at a glance different types of market forms on the basis of the nature of competition:
B . Imperfect Competition:
C. Pure or Absolute Monopoly:

Content: But if there are restrictions on the entry of new firms, the existing firms may enjoy super-normal profit and the competition will be imperfect. Only when there are no restrictions on entry or exit, the competition is said to be perfect. (iv) Perfect Knowledge: Another assumption of perfect competition is that the purchasers and sellers should be fully aware of the prices that are being offered and accepted. In case there is ignorance among the dealers, the same price cannot rule in the market for the same commodity. When the producers and the customers have full knowledge of the prevailing price, nobody will offer more and none will accept less, and the same price will rule throughout the market. The producers can sell at that price as much as they like, and the buyers also can buy as much as they like. ADVERTISEMENTS: (v) Absence of Transport Costs: If the same price is to rule, it is necessary that no cost of transport has to be incurred.