Market Model on Pure Competition

Market models pure competion / perfect competition. There are 4 market models. monopolistic competition Oligopoly pure monopoly Comparison of markets: Feature Pure Monopolistic Oligopoly Pure competition competition Monopoly Number of A very large Many Few One firms number Type of Homogenous Heterogeneous Either Unique product Conditions of Very easy Relatively easy Significant Completely entry obstacles blocked Non-price None Considerable Typically a great Mostly public competition emphasis on deal relations, advertising. advertising brand names, trademarks Firm's control None Some Limited by mutual Considerable over price interdependence Pure Competition Pure Competition: relatively rare in real world but still relevant characteristics of pure competition: There is a large no. of sellers that offer product in national Sinternational marksts, Very large numbers. Standardized product Purely competitive firms produce a standardized/identical/homogenous product. There is no attempted to differentiate products They do not engage in non-price competitions Products from diff firms are perfect substitutes for cach other. Price takers Individual firms have no control over product price Firms change market price, can only adjust to it (adjust autput) Firm must accept price predetermined by market (eg) Firm A raising price to Ra will surink profit be firm & sells cxact same for RI Free entry and exit There are no legal teshinal/financial obstacles preventing firms from entering/exiting market