Competitive Market

A Competitive Market is a market where a large numbers of producers compete with each other to satisfy the wants and needs of a large number of consumers.

• Context:
  • It can range from being a Formal Competitive Market to being a Nominal Competitive Market.
  • …
• Example(s):
  • a Financial Market, such as Stock Market.
  • …
• Counter-Example(s):
  • a Monopoly, such as a natural monopoly.
• See: Market Supply, Market Demand, Zero-Sum Game, Nominal Competitive Market, Formal Competitive Market, Labor Market.

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References

2013

• http://www.economicsonline.co.uk/Competitive_markets/Competitive_markets.html
  • QUOTE: A competitive market is one in which a large numbers of producers compete with each other to satisfy the wants and needs of a large number of consumers. In a competitive market no single producer, or group of producers, and no single consumer, or group of consumers, can dictate how the market operates. Nor can they individually determine the price of goods and services, and how much will be exchanged. Competitive markets will form under certain conditions.

    For markets to form a number of necessary conditions must be met, including:

    1. The profit motive. Free markets form when the profit motive can be satisfied .... more
    2. The principle of diminishability. Stocks of pure private goods will diminish as the good is purchased. .... more
    3. The principle of rivalry. Consumers must compete with each other to get the benefit provided by the good or service... more
    4. The principle of excludability. For markets to form it is essential that consumers can be excluded from gaining the benefit that comes from consumption. .... more
    5. The principle of rejectability. It is also necessary that consumers can reject goods if they do not want or need them.... more

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