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: It can sell as much as it likes at the prevailing price. Why should it then think of lowering its price? Hence it cannot raise its price and it need not lower it. That is why the prevailing market price is accepted and acted upon by all dealers. Thus, if the above two conditions, viz., homogeneous products and a large number of buyers and sellers are found in a market, it is said to be under pure competition. ADVERTISEMENTS: Diagrammatic Representation: Under pure competition, the average revenue curve (also called demand curve) of a firm will be a horizontal straight line, which means that any firm can sell any quantity at the prevailing price. Since the number of firms is very large, no individual firm has the power to vary the market price.