A Perfect Competitive Market Structure - 1075 Words

In the economy, market structures are examined thoroughly. There are four basic kinds of market structures in economics: perfect competition, monopolistic competition, oligopoly, and monopoly. Perfect competition is the one that is being focused on predominantly. â€Å"A perfectly competitive market is a market in which all market participants are price takers† (Krugman Wells 1). â€Å"Price takers are producers and consumers whose actions have no effect on the market price of the good† (Krugman Wells 1). A perfect competitive market structure consists of three aspects that will be discussed. When perfect competition comes to mind, the Organic Food Market structure can be associated to it or the perfectly competitive market industry. In the Organic market, all the farmers in the industry are each producing the same product for the buyers and sellers. The consumption of the individual consumer or the production of the individual producer will not affect the market pric e of the goods. â€Å"In a perfectly competitive market all participating producers and consumers are price-takers† (Krugman Wells 1). As stated by Paul Krugman and Robin Wells, in a perfectly competitive market â€Å"neither consumption decisions by individual producers affect the market price of the good† (Krugman Wells 1). â€Å"There are two necessary conditions for perfect competition, the first being that none of the producers have a large market share, and the second being that the goods produced are being regarded as aShow MoreRelatedThe Market Structures Of The Village Of Forest Park, Illinois1273 Words   |  6 Pages Introduction When discussing microeconomics, there are several market structures that may have an impact the economy in the Village of Forest Park, Illinois. 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