General characteristics of the market of perfect competition. Perfect competition examples What sells in a perfect competition market

The main features of the market structure of perfect competition in the very general view have been described above. Let's dwell on these characteristics in more detail.

1. The presence on the market of a significant number of sellers and buyers of this good. This means that no seller, no buyer in such a market is able to influence market equilibrium, which testifies to the lack of market power for any of them. Market subjects here are completely subordinate to the market element.

2. Trade is carried out in a standardized product (eg wheat, corn). This means that sold in the industry by different firms the product is so homogeneous that consumers have no reason to prefer the products of one firm to the products of another manufacturer.

3. The inability for one firm to influence the market price, since there are many firms in the industry, and they produce a standardized product. In perfect competition, every single seller is forced to agree to the price dictated by the market.

4. Absence of non-price competition, which is associated with the homogeneous nature of the products sold.

5. Buyers are well informed about prices; if one of the producers increases the price of their products, they will lose buyers.

6. Sellers are unable to collude over prices due to the large number of firms in the market.

7. Free entry and exit from the industry, ie, there are no entry barriers blocking entry into this market. On the market perfect competition there is no difficulty in creating new firm, there are no problems in the event that an individual firm decides to leave the industry (since firms are small in size, there will always be an opportunity to sell the business).

Markets of perfect competition can be cited as examples of markets certain types agricultural products.

For your information. In practice, none of the existing markets is likely to meet all the criteria of perfect competition listed here. Even markets very similar to Perfect Competition can only partially satisfy these requirements. In other words, perfect competition refers to ideal market structures that are extremely rare in reality. Still study theoretical concept perfect competition makes sense for the following reasons. This concept allows you to judge the principles of functioning small firms existing in conditions close to perfect competition. This concept, based on generalizations and simplification of analysis, allows us to understand the logic of the behavior of firms.

Examples of perfect competition (of course, with some reservations) can be found in Russian practice. Small market traders, ateliers, photo studios, auto repair shops, construction crews, apartment renovators, farmers in food markets, stall retail trade can be regarded as the smallest firms. All of them are united by the approximate similarity of the products offered, the insignificant size of the market, the scale of the business, the large number of competitors, the need to accept the prevailing price, that is, many conditions of perfect competition. In the sphere of small business in Russia, the situation, which is very close to perfect competition, is reproduced quite often.

The main feature of the market of perfect competition is the absence of price control on the part of an individual manufacturer, that is, each firm is forced to focus on the price set as a result of the interaction of market demand and market supply. This means that the volume of production of each firm is so insignificant in comparison with the output of the entire industry that changes in the amount of products sold by an individual firm do not affect the price of the product. In other words, a competitive firm will sell its product at a price already on the market. As a consequence of this situation, the demand curve for the product of an individual firm will be a line parallel to the abscissa axis (perfectly elastic demand). This is shown graphically in the figure.

Since the individual manufacturer is not in a position to influence market price, he is forced to sell his products at a price set by the market, that is, at P 0.

Absolutely elastic product demand competitive seller does not mean that a firm can infinitely increase production at the same price. The price will be constant insofar as the usual changes in the output of an individual firm are insignificant in comparison with the output of the entire industry.

For further analysis, it is necessary to find out what will be the dynamics of the indicators of gross and marginal income (TR and MR) competitive firm depending on the volume of production (Q), if any volume of products produced by the firm will be sold at a single price, ie P x = const. In this case, the TR chart (TR = PQ) will be represented by a straight line, the slope of which depends on the price of the sold product (P X): the higher the price, the steeper the slope will be on the chart. In addition, a competitive firm will be faced with a graph of marginal revenue, parallel to the abscissa axis and coinciding with the graph of demand for its products, since for any value of Q x the value of marginal revenue (MR) will be equal to the price of the good (P x). In other words, for a competitive firm MR = P x. This identity takes place only under conditions of perfect competition.

The marginal revenue curve of a perfectly competitive firm is parallel to the abscissa and coincides with the demand graph for its products.

Improving production, reducing production costs, automating all processes, optimizing the structure of enterprises - all this is an important condition for development. modern business... What's the best way to get businesses to do all this? Market only.

The market refers to the competition that arises between enterprises that produce or sell similar goods. If there is a high level of healthy competition, then in order to exist in such a market, it is necessary to constantly improve the quality of goods and reduce the level of overall costs.

Perfect competition concept

Perfect competition, examples of which are given in the article, is the exact opposite of monopoly. That is, this is a market in which an unlimited number of sellers operate, who deal with the same or similar goods and at the same time cannot influence its price.

At the same time, the state should not influence the market or engage in its complete regulation, since this can affect the number of sellers, as well as the volume of products on the market, which is immediately reflected in the price per unit of goods.

Despite the seemingly ideal conditions for doing business, many experts are inclined to believe that in real conditions, perfect competition will not be able to exist on the market for a long time. Examples that confirm their words have happened more than once in history. In the end, the market became either an oligopoly or some other form of imperfect competition.

can lead to decline

This is due to the fact that prices are constantly decreasing. And if human resource in the world is big, but the technological is very limited. And sooner or later, enterprises will move on to modernizing all fixed assets and all production processes, and the price will still fall due to the attempts of competitors to conquer a larger market.

And this will already lead to functioning on the verge of the break-even point or below it. It will be possible to save the situation only by influence from outside the market.

The main features of perfect competition

The following features can be distinguished that a market of perfect competition should have:

A large number of sellers or manufacturers of products. That is, all the demand that is on the market must be met not by one or several enterprises, as in the case of monopoly and oligopoly;

Products in such a market must be either homogeneous or interchangeable. It is understood that sellers or manufacturers produce such a product that can be completely replaced by the products of other market participants;

Prices are set only by market means and depend on supply and demand. Pricing should not be influenced by the government or specific sellers or manufacturers. The price of a product should be determined by the level of demand as well as supply;

There should be no barriers to entry or entry into the market of perfect competition. Examples can be very different from the sphere of small business, where special requirements are not created and special licenses are not needed: atelier, shoe repair services, etc.;

There should be no other outside influences on the market.

Perfect competition is extremely rare

V real world it is impossible to give examples of firms of perfect competition, since there is simply no market that operates according to such rules. There are segments that are as close as possible to its conditions.

To find such examples, it is necessary to find the markets in which small businesses mainly operate. If any firm can enter the market where it operates, and it is also easy to leave it, then this is a sign of such competition.

Examples of perfect and imperfect competition

If we talk about imperfect competition, then monopoly markets are its bright representative. Enterprises that operate in such conditions have no incentive to develop and improve.

In addition, they manufacture such goods and provide such services that cannot be replaced by any other product. This explains the poorly controlled, established non-market way. An example of such a market is a whole sector of the economy - Oil and gas industry, and the monopoly company is Gazprom.

An example of a perfect competition market is the car repair service. Various service stations and garages both in the city and in others settlements there are many. The type and amount of work performed are almost the same everywhere.

It is impossible in the legal field to artificially increase the prices of goods if there is perfect competition on the market. Examples confirming this statement, everyone has seen in his life more than once in the ordinary market. If one seller of vegetables raised the price of tomatoes by 10 rubles, while their quality is the same as that of competitors, then buyers will stop buying from him.

If at can influence the price by increasing or decreasing supply, then in this case such methods are not suitable.

With perfect competition, you cannot raise the price on your own, as a monopolist enterprise can do.

Due to the large number of competitors, it is impossible to simply increase the price, since all customers will simply switch to purchasing the corresponding goods from other enterprises. Thus, an enterprise can lose its market share, which will entail irreversible consequences.

In addition, in such markets, there is a decrease in the prices of goods by individual sellers. This is in an attempt to "win back" new market shares to increase income levels.

And in order to reduce prices, it is necessary to spend less raw materials and other resources on the production of one unit of production. Such changes are possible only due to the introduction of new technologies and other processes that can reduce the cost of doing business.

In Russia, markets that are close to perfect competition are not developing fast enough

Talking about domestic market, perfect competition in Russia, examples of which are found in almost all spheres of small business, is developing at an average pace, but it could have been better. The main problem is the weak support of the state, since so far many laws are focused on supporting large producers, who are often monopolists. In the meantime, the small business sector remains without special attention and the necessary funding.

Perfect competition, examples of which are given above, is the ideal form of competition from the side of understanding the criteria of pricing, supply and demand. Today, no economy in the world can find such a market that would meet all the requirements that must be observed in perfect competition.

Imperfect competition - economic phenomenon, a market model in which manufacturing firms have the opportunity to have a real impact on the price of goods. On the other hand, there is the concept of perfect competition. This economic model is a system characterized by an infinite number of buyers and sellers, homogeneous and divisible products, high mobility of production resources, equal and complete information access of all participants to the price of products, goods, the absence of any obstacles to entry and exit to the market. Violation of at least one of these conditions theoretically means imperfect competition.

It is clear that achieving conditions of pure competition is practically impossible, while imperfect competition is a widespread phenomenon.

Imperfect competition as an economic phenomenon

Based on the properties inherent in the conditional model of perfect competition, it is possible to determine which features are inherent in imperfect competition and how they manifest themselves in real market conditions.

This structure is characterized by various kinds of barriers that restrict entry to and exit from a certain market sector. There are limitations in product pricing information. The product itself is either unique, or its properties are differentiated in comparison with others, which leads to the ability of producers and sellers to control prices for it: overstate, keep at a certain level. The goal is to maximize profit.

A striking example of imperfect competition is natural monopolies - firms whose activities are related to the supply of energy resources (electricity, gas) to the population. At low costs, such monopolists can set in the future any price for their products, while entry barriers to the specified market for newcomers are insurmountably high.

The characteristic features of market relations with imperfect competition are thus determined quite firmly:

Monopoly, small and medium business present on the market at the same time. They compete with each other, but the monopolists, to one degree or another, have an advantage in regulating prices. This applies to both buyers and sellers of the product.
In the long term, imperfect competition is aimed at monopolizing the market (sales, raw materials, labor market, etc.), in contrast to perfect competition, which is characterized by the main goal - the sale of goods.
The process of competition involves not only sales markets (retail, wholesale), but also production. Manufacturing innovation turns into a method of fighting the competition. The purpose of their implementation is to reduce production costs.
There are various methods of competitive struggle: from the use of price levers, as the most obvious ones, to non-price ones, aimed at improving the properties of goods, improving marketing and advertising policies. Non-economic methods are also used, which are commonly referred to as unfair competition.

Forms of competition for markets with imperfect competition, they have the following characteristics:

price- lowering prices for products, reducing the volume of costs in the production and marketing process, manipulating pricing, price maneuvers designed to attract a buyer;
non-price- emphasis on product quality, attracting customers through various promotions, offering a larger volume of goods or services for an equal price, non-standard advertising campaigns;
non-economic- industrial, economic espionage, bribery of responsible persons, etc.

Imperfect competition in all its diversity was considered in the works of E. Chamberlin, J. Hicks, J. Robinson, A. Cournot.

Forms of imperfect competition

Oligopoly characterized by a rather limited number of sellers of goods or services (communication services market). Oligopsony- a rather limited number of buyers (labor market in small towns). At monopolies there is only one seller on the market (gas supply). At monopsony- the only buyer (sale of heavy weapons).

At monopolistic competition there is a large number of manufacturers and sellers in the market sector selling products with similar properties, but not identical (most often found in retail, the sphere of consumer services).

Experts carry out comparative analysis these forms in the context of four market factors:

the number of sellers (producers);
differentiation of the market product;
opportunities to influence prices;
entry-exit barriers.

For example, in the case of a monopoly, there is only one quantitative indicator, prices are completely controlled, products have unique qualities, and barriers to market entry are very high, etc.

Labor market

Imperfect competition in the labor market is a complex phenomenon that includes several important factors. Note that this market sector is most susceptible to regulation in order to minimize the negative consequences of the "imperfect market".

Labor market regulatory factors:

State. Legally regulates the level wages, preventing him from completely falling under the influence of market processes (indexation of income, establishment of minimum wages, etc.).
Trade union organizations. They direct their efforts to increase the level of remuneration of workers in the industry, the region, prepare and carry out the signing of agreements between trade unions and employers - market participants, in the indicated direction.
Large firms, corporations. The level of remuneration of specialists is established, which is retained for a long time. Not interested in frequent revision of the level of remuneration of employees.

Market laws work in a special way when applied to the labor market. The sale of labor force, skills and abilities is fixed, as a rule, by a long-term employment contract, which gives employment guarantees to the employee, despite fluctuations in supply and demand. In addition, individual labor contract or the agreement cannot contain conditions worse than those enshrined in the collective agreement or in labor legislation.

In this case, the seller receives guarantees of employment, is withdrawn from market relations for the duration of the contract with the buyer.

The presence of restrictions on the worst terms in comparison with the collective agreement does not allow the employer to infinitely worsen the terms of individual agreements, choosing the most "accommodating" sellers. This factor is most significant if there is a lack of trade union organization.

Imperfect competition and government regulation

Imperfect competition, being far from ideal models for building an economy, has its own negative sides and the consequences: an increase in product prices not justified by an increase in costs, an increase in production costs themselves, a slowdown in progressive trends, a negative impact on competitiveness on the scale of world markets, and finally, a slowdown in economic development.

At the state, governmental, level, there are always administrative barriers for market participants, for example, the exclusive rights that the state gives to a particular company.

On a note! Regulatory barriers can be expressed in more than government regulation as such, but also in the possession of the right to rare natural resources, progressive scientific, technical developments, confirmed by a patent, high level start-up capital required to enter the market sector.

At the same time, the state, realizing the global danger of market monopolization, is fighting it. Antimonopoly Regulatory Measures - a package of antimonopoly legislation that is constantly being improved, taking into account market trends. On the basis of it, administrative antimonopoly control of markets is carried out by authorized state antimonopoly structures. An effective mechanism for influencing monopolists is being developed.

Control is represented by a set of financial sanctions, the organizational mechanism does not affect the monopolists themselves, destroying them as a market phenomenon, but indirectly - by supporting small and medium-sized businesses, reducing customs duties etc. Legislative regulation often directly prohibits certain economic steps that contribute to the formation of even larger monopolies, for example, the merger of large firms in a certain market sector.

Outcomes

Imperfect competition, as opposed to a perfect, ideal model, exists in the real market structures of the modern economy. The purpose of imperfect competition is to capture the market, to monopolize it.
The forms of imperfect competition differ in the number of buyers and sellers in a given market sector. It is possible to conduct a comparative analysis of each form, paying attention to the level of barriers to entry into the market, the ability to influence prices, etc.
The labor market in conditions of imperfect competition is subject to many regulatory factors from the state, trade unions, and large companies.
The presence of an employment agreement leads to the temporary departure of the seller from the labor market, allows him to guarantee him stable employment, i.e. demand labor resources that he possesses.

It is characterized by the balance of supply and demand. Thanks to this, the market is regulated independently and the seller or the buyer cannot influence most of the processes, in particular, pricing.

In this model, competition between sellers reaches its peak. Due to the fact that market participants have practically no influence on the terms of sale, the economy is resistant to negative processes such as unemployment and inflation.

Perfect competition has the following features:

a large number of buyers and sellers, including representatives of small and medium-sized businesses;
sellers and manufacturers offer similar goods;
easy entry to the market even for small companies, no barriers from the state;
high awareness of all market participants about the state of affairs in it, processes, subjects, etc., everyone can get information without problems and restrictions;
sellers and buyers cannot influence the terms of trade, they take them for granted;
high mobility of resources.

If a model does not have at least one of these features, it is not perfect competition. Any market strives for this structure. The main task of the state in this process is to create the proper conditions through the formation of a regulatory and legal framework.

The benefits of perfect competition

Striving for perfect competition leads to high efficiency market economy... Despite the fact that many call such a model ideal, it has both undeniable advantages and some disadvantages.

The advantages of perfect competition:

self-regulation of the market;
absence of a commodity deficit;
efficient allocation of resources;
high production efficiency;
no overpricing;
equality of opportunity for market participants;
freedom to develop entrepreneurship;
the state does not interfere in market processes;
both buyers and sellers benefit here.

Disadvantages of Perfect Competition

Despite the large number of advantages, pure competition has certain disadvantages:

the market system is unstable;
overproduction risk;
market participants get different results;
each market participant is focused on personal interests, ignoring public ones.

Almost all the disadvantages of this market model boil down to the fact that equal opportunities cannot be achieved. This is due to the fact that each market participant organizes production, marketing campaign, allocates resources, uses innovative technologies... Therefore, success is achieved by the one who competently approaches the organization of the production and sale process, and also uses advanced technologies to get ahead of competitors.

To achieve economic efficiency, first of all, it is necessary to achieve efficiency of production and resource allocation. This is easy to achieve in a highly competitive environment. Therefore, it is considered the ideal market model. But in reality, its practical implementation does not exist. Minimum costs, efficient allocation of resources, absence of shortages, self-regulation of processes - compliance with all these conditions is impossible in the long term. Although the desire to achieve a system that is as close as possible to pure competition allows the economy to develop.