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Custom Perfect Competition
Market perfect competition is a theory describes conditions that occur in the market place. There are different types of competitions in markets based on goods and services offered in the market. The sellers, buyers, prices, and goods determine the competition type in a market. There are some forms of competitions like monopolies and oligopolies. This paper describes the perfectly competitive market in the mobile phone brands production sector from different companies.
The perfect competition in the market place is a situation that occurs so that no one participant in the market has the power to set and influence the prices of the homogenous product. In this case, the market being used as an example is the mobile phone market where firms are selling their brands to people who use the mobile phones. There are few competitive perfect markets because the conditions of the perfect competition market are strict (Lee, 2003). In this case, the mobile phone handsets have influence the selection by buyers within the variety so that it can be bought at different prices.
Some characteristics of the perfect competition are that all the competitors sell the same product that is the mobile phone handset. The firms in this handset market are also price takers. The firms selling the mobile handsets have freedom of entry and exit to o out of the market. The buyers in this market have the knowledge on the mobile phone handsets being sold also the prices that are charged by different firms.
Because of the availability of many brands of the handsets in market, firms share the market to relatively smaller shares because the products are identical and serve the same purposes. The handsets are in this case standardized due to the functionality aspect they offer to the buyers. The government does not regulate the prices of the mobile phones in ties industry other than the normal taxes on business. The competitive aspect in this sector is mainly through prices such that the handset selling firms compete mainly using the prices (Lee, 2003). This is the ideal competitive environment where the products being sold are identical.
In an ideal world markets the firms are always price takers and have the freedom of exit or entry from the perfectly competitive markets. However, the buyers are aware of all the prices offered by different firms on certain products. The products sold are however, identical in the market.