What does market mean? How does competitive market evolve? What are the major characteristics of such market? So, let’s find all through “What is mean by competitive market and its major characteristics..
“Market” meaning and definition
For fresh learners, market is an interlinked web of buyer and seller to purchase or sell goods and services.
Mainly, forces of market such as demand, supply, government incentives, and traders largely determine the movement and direction of respective market.
Conventionally, market can be classified on the basis of place, commodity, means, participants, and government regulations.
Like, local, global, electronic, automotive, open, closed, competitive etc. are some examples of different types of market, prevailing in the world.
What is mean by competitive market ?
It is a type of market in which everyone enjoys equal level playing field. And, no one controls the prices of commodities but the forces of demand and supply.
In simple terms, it is a market where everyone is price taker, and there hardly possibility of monopoly.
Examples of competitive market
Such type of market is hardly possible in secondary and tertiary sector. Usually, such market whether it is perfect or not, is possible in the primary sectors commodities. Foodgrains, vegetables, fruits markets, at certain extent seems competitive.
Largely, in the developing or underdeveloped countries, the supply of quantity and buyers determine the prices of commodities. Likely, in the peak season of production, prices remain low. Whereas, in lean season, start rising.
Factors of production as a determinant
Simply, the “Factors of production” are the major determinant of the nature of product and prices. Actually, advantage in factors of production always award the benefits of comparative advantage compare to trading competitors. Here are the major types of factors..
These are the basic factors that one needs to understand before to begin any business.
To make product cost effective and competitive in the globalizing world, it is necessary to have considerable advantages in such factors..
Major characteristics of competitive market
In every competitive market, more or less same characteristics are noticed. Here are some of them.
- Large number of market participants — buyers and sellers.
- Many sellers sell and buyers buy similar identical products.
- Simply, identical product is sold and bought by large number of participants
- Identical product means product with similar features and content.
- No one has special influence over the prices of market or market power.
- Everyone is price taker
- Equally accessible product information for all
- No barriers on entry for new entrants
- No firm has absolute market power but relative.
Considering all, it looks that such market is a mere yardstick to determine the ideal nature of market. As of now, such market is hardly possible..
This is all about the what is mean by competitive market and major characteristics..