Perfect Competition And Monopolistic Competition Essay

Perfect Competition And Monopolistic Competition Essay

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Can you imagine the world with a limited amount of choices when it comes to purchasing different products and services? How does perfect competition and monopolistic competition differ and effect our buying power? As stated by Investopedia (2016), “Perfect competition is the opposite of a monopoly, in which only a single firm supplies a particular good or service, and that firm can charge whatever price it wants because consumers have no alternatives and it is difficult for would-be competitors to enter the marketplace (para 1)”.

Perfect Competition
Perfect competition, also known as, pure competition is defined as the situation prevailing in a market were buyers and sellers are so numerous and well informed that all elements of monopoly are absent. In a perfect competition the market price of a commodity is beyond the control of individual buyers and sellers within the market.
When describing perfect competition, it is met within five criteria market bullet points. All firms may sell an identical product, for instance a plethora of cell phone companies all selling the iPhone. All firms are price-takers, they cannot control the market price of their product, which backs up the iPhone even more because you can’t go to one place and find the iPhone cheaper than another place. Prices will be around the same no matter where you go, sellers have no control. All firms have a relatively small market share, Buyers have complete information about the product being sold and the prices charges by each firm. And lastly the industry is characterized by freedom of entry and exit.
1.2 Pricing Strategies
Perfect competition is said to be the complete opposite of a monopoly, only because when a single firm provides a good or service then it i...

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...pple with their Android. During the second quarter of 2015 Samsung took a 21.7 percent of the global smartphone market, with shipments 73.2 million units. A reason I feel Samsung is doing much greater then apple right now is their ability to have all these different features, which not only add modern things to their phone but also longevity. With the three new water proof phones that Samsung has come out with Apple has yet to release their first one.
Apple and Samsung have been long duking it out for the title of the king of the smartphone market. Over the past few years Samsung has won the title each quarter. Apple did win the last quarter in year 2014 for their major sales on the iPhone 6 and the iPhone 6 plus, but Samsung quickly regained their spot back after the company’s older galaxy phones sold at a vast rate, as a result of discounts and sales promotions.

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