Mani Masood
A competitive market is a market with sufficient number of both buyers and sellers such that no one buyer or seller is able to exercise control over the market or the price.
Efficiency is achieved because competition among buyers forces buyers to pay their maximum demand price and competition among sellers forces sellers to charge their minimum supply price for the given quantity exchanged.
In economic theory, perfect competition describes markets such that no participants are large enough to have the market power to set the price of a homogeneous product. Because the conditions for perfect competition are strict, there are few if any perfectly competitive markets.
And in the present day, as the first decade of the 21st century draws to a close we see massive price hikes, specially in common food products where branding has little effect on the product. For the most part competition and competitiveness has gone to hell in a hand basket. Companies produce lower and lower quality products and try to sell them for the highest price possible.
Consumer complains and discourse has little effect on sellers.
Generally, the concept of free market, free competition model, no matter how noble has one basic genetic flaw. All business enterprises by their inert nature work on eliminating competition, establishing a monopoly or at least a cartel, and controlling the market dynamics – there by forcing the market to enter into “trade-communism” so to say.
So what is the best defense, promoting small businesses, if no one business is big enough to have absolute majority of a share you have liberal and free market.
Mani
