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The level of competition in a market influences pricing and output decisions. Discuss this in relation to a perfectly competitive Market Structure. “Competition refers to the process of active rivalry
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The level of competition in a market influences pricing and output decisions. Discuss this in relation to a perfectly competitive Market Structure. "Competition refers to the process of active rivalry between the firms operating in a market as they seek to win and retain buyer demand for their brands". (Pass & Lowes 1994) In any business, competition is necessary for companies to strive towards a more successful organisation. If a company had no competition they would not try to give the customer the best service or product at the lowest available price. They could and would charge any rate for the poorest quality good. There are many different models of market structure; perfect competition, monopolistic competition, oligopoly and monopoly. A perfectly competitive market does not really exist but is essential for comparison purposes against the other market structures. There are several conditions that must exist for a market to be perfectly competitive....
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