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Competition
A market structure in which there are many buyers and sellers and in which no individual or group can significantly influence market outcomes. Competition is usually used with some regularity in conditions or assumptions to model efficiency in economics. From a theoretical perspective, competition is alternatively defined as perfect competition.
To observe the outcome of efficiency in this market structure, it is also assumed that the participants in the market have freedom to enter and exit the market, that the products of this market are homogeneous or identical, that buyers and sellers are reasonably knowledgable of market conditions, and that sellers are price takers.
These assumptions provide a basis for intuitively understanding the operations of the competitive market. Because participation in the market is unrestricted, profits can ...