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We have a lot of different market structures. The spectrum of competition ranges from perfectly competitive markets where there are many sellers who are price takers to a pure monopoly where one single supplier dominates an industry and sets price(monopolistic competition, oligopoly, monopsony, oligopsony, monopoly, natural monopoly, and perfect competition). I will try to find advantages and disadvantages in market structure called perfect competition.
Perfect competition is a theoretical market structure. It is primarily used as a benchmark against which other market structures are compared. This structure sometimes referred to as “pure competition”. Perfect competition describes a market structure whose assumptions are extremely strong and highly unlikely to exist in most real-time and real-world markets. The reality is that most markets are imperfectly competitive. Nonetheless, there is some value in understanding how price, output and equilibrium is established in both the short and the long run in a market that holds true to the tough assumptions of a world of perfect competition.…
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