FIRM COMPETITION & MARKET STRUCTURE
7.1 Why Perfect Competition Usually Does Not Happen
Perfect Competition Model and Its Variants
• The perfect competition model monopolistic
competition, and contestable markets are ideal market
conditions that encourage aggressive competition and
maximize value for all market participants.
• Agricultural markets, particularly in the early 20th
century, were viewed as a close-to-perfect competition
model due to the large number of
farmers and consumers.
• However, recent changes have deviated from perfect
competition, with farmers selling to food processing
companies, large distributors, and grocery store chains.