perfect competition, market structure, theory of the firm, online markets
When students are introduced to the theory of the firm, typically one of the first industry structures they are presented with is a perfectly competitive market. However, it can be difficult to think of real-world examples of perfectly competitive markets, or even markets that come close to having the characteristics of perfect competition. Rather, perfectly competitive markets are often introduced as a benchmark industry structure, a theoretical industry type that has a number of desirable attributes. While it may be difficult to think of real industries that can be described as perfectly competitive, this industry structure can be considered as an ideal, and policymakers may consider whether real-world industries can be modified to make them closer to this ideal, for example through the removal of barriers to entry.
Your organisation does not have access to this article.
Sign up today to give your students the edge they need to achieve their best grades with subject expertise
Subscribe
