Perfect Competition
Characteristics
- Perfect Competition is an industry in which there are a large numbers of independently acting seller which sell their products.
- The firms sells identical products. Product from others firm will be perfect substitutes for each others product
- They are the price taker. They don't have the ability to exert control over the price of the product.
- The demand for each firm output is perfectly elastic.
- There are no barriers to enter the industry
- established firm have no advantage over new firms
Wet Market
There are a lot of markets out there which is applying perfect competition especially in the wet market. Wet market usually sells item such as fish , chicken , pork, vegetable , and fruits . They provide all kind of food and their customer are mostly from housewives. wet market is all over the world and there are many competitors selling the same product. Therefore, there are a lot of perfect substitutes.
The hawkers which set up their stalls at the wet market are the price taker and they don't have the ability to exert control over the price of the product as when they change the price, their customers would choose to buy other substitutes from the competitors because the competitors are offering at a lower price.
Finally, anyone could easily enter into the industry and start their business as there are no barriers of entry. The market and established firm have no advantage over new firms so the new firms would manage to survive in the industry.
