In pure competition, product prices are set by market demand, not by sellers.
Pure competition is an ideal economic scenario in which there are a large number of independent sellers and consumers, and the given product is in ready supply.
Sellers are unable to decrease the price of a product because it is so readily available from competitors, and consumers are unable to decrease it because there is such wide demand.
Most agricultural markets are good examples of pure competition.
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Examples of pure competition include agricultural markets and the Common Stock Market.
Milk, for example, is a product which is fairly similar across suppliers, available in almost every part of the world, is widely consumed and sells at consistent prices.
If a consumer goes into a grocery store, the supply of red delicious apples may come from multiple farms.
Prices are determined by what consumers are willing to pay.
In pure competition, or perfect competition, the sellers have comparable pricing and earnings.
One company does not dominate the other competitors in a perfectly competitive market. We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities.
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