ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A good example of a perfect competition situation is a fresh fish market on a quay where many people visit. Each fish is equivalent and it does not matter which vendor you buy from. All the sellers are close to each other so they know the price of each fish stall.

Detailed explanation-2: -What Is an Example of Perfect Competition? Consider a farmers market where each vendor sells the same type of jam. There is little differentiation between each of their products, as they use the same recipe, and they each sell them at an equal price.

Detailed explanation-3: -Pure or perfect competition is a market structure defined by a large number of small firms competing against each other. A single firm doesn’t have significant marketing power, and as a result, the industry produces an optimal level of output because firms don’t have the ability to influence market prices.

Detailed explanation-4: -Street food vendors are considered to be an example of a perfect competition mainly because, the food sold are homogeneous in nature, and are price almost similarly at all vendors. Consumers can free buy food at any vendor they prefer. Also, sellers can enter or exit the market freely.