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Perfect Competition Examples Companies

There are perfect competition examples companies in different sectors. These are sectors that are common in most parts of the world. Below is a list of common perfect competition examples you may note around you.

Perfect Competition Examples Companies

1. Companies in Agriculture

Many farmers produce identical crops and animal products. For instance, corn farmers cannot easily differentiate between the taste of their corn of the taste of corn from another farm.

The same case applies to daily cow farmers. None of them can differentiate which milk was from their cow when packaged.

There are few barriers to entering or exiting farming. Provided a farmer has a space, tools, equipment, and the necessary labor, they are good to hit the ground and get their business running.

2. Companies in the Stock market

There are many buyers and sellers of stocks, and the choice to buy or sell stocks depends on an individual investor’s speculation. If an investor thinks their current stock price will depreciate soon, they can sell them to cushion against losses. The same happens if an investor speculates an increase in certain stocks’ market value.

The price of shares in the stock market is determined by supply and demand. All investors in this market (those selling and buying shares) are price takes and not setters. They have to accept a share’s prevailing market price or let go of their position in certain shares.

3. Players in Foreign Exchange

Just like in the stock market, there are many buyers and sellers of different currencies in the forex market. These are also takers of market prices at which currencies are exchanged. This process is dictated by geopolitics, and economics news, among others.

Information about currencies is perfectly available to all sellers and buyers of a currency pair. This enables them to determine which currency pair they should long or short positions for.

For instance, information about consumer confidence in a currency is readily available to all buyers and sellers. How a forex trader decides to speculate the direction of currency pair movement depends on how they interpret such forex news.

4. Companies in online retailing

There are many sellers and buyers of merchandise over the web. For example, Amazon camera sellers could sell the same models with identical features. Their customers are also looking for identical products, and they compare sellers based on prices.

Furthermore, buyers have perfect information about products sold by sellers. For instance, a VPN buyer online knows discounts given by companies like Surfshak. Furthermore, they can compare such VPN providers with ExpressVPN and NordVPN.

There is a low barrier to entering into online retailing. All you would basically need is a good data connection, and there you are ready to set up an online store. With even cheap e-commerce hosting, you are ready to establish a secure shop to retail products online.

5. Street vendors

In some areas, many street vendors sell similar products, such as fast food and clothing. Let’s use an example of street food vendors who sell boiled eggs. None of them can differentiate the taste of an egg they are selling from eggs from other vendors.

There are other street vendors who sell services. For instance, a show shiner is a street vendor who cleans and polishes other people’s shows. Customers of such street vendors have perfect information about the quality of work of each shoe shiner and their pricing.

6. Companies in Fishing

A person who knows how to fish and has the equipment and access to the fishing ground can supply fish to the market. Fishermen who get their fish from the same water often sell the same types of fish. This makes them identical in the market, and none sets the prices of certain types of fish.

Buyers and sellers also have perfect information at their disposal. They know which type of fish is the sweetest and which is the best quality.

7. Lumbering

Even though lumbering may not be a perfect market structure, it exhibits some of its features. For instance, sellers and buyers know which wood is the best for a certain type of carpentry. This informs consumers to buy certain woods for furniture and other products made from such wood.

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