As we proceeded with the blog, it becomes very important to understand the concept of market thoroughly. With this in mind, we would take a detour from the normal course and get a bit further on the concept of market.
We began with defining the concept of market in the earlier blog. In this blog we would move a bit further and look into some important flavors that economists give to the market. This understanding is important since these flavors encapsulate many common features of the market its competitiveness in the market. We begin with defining the "Perfectly Competitive Market".
A Perfectly Competitive Market is one that has many buyers and sellers, so that no single buyer or seller has a significant impact on price.
As an Example we could imagine the market for food grains like rice. There are many sellers and many buyers - the choice of any single buyer or seller wouldn’t really affect the overall impact of the market and the price that is defined in the market.
While defining perfectly competitive market the underlying assumption with the large number of buyers and sellers being present is that they would be very competitive with each other. So even if the numbers are not really large but there is very huge competition amongst these sellers or buyers; then too we could assume such a market as a perfectly competitive one for any analysis.
Read in Kannada: http://somanagement.blogspot.com/2011/04/blog-post_04.html