What is meant by perfectively competitive market? ?

Question

What is meant by perfectively competitive market? Does the example of ice-cream fit this description? Is there another type of market that better characterizes the market for ice-cream?

Answer 1

Let's see how well I remember my economics from last year:

A perfectly competitive market is one where there are many firms producing a homogenous product, or one that people couldn't really tell the difference between. It's easy to have your business join a perfect competition because your good will be on par with all the others. The price is not controlled by any single firm because if one good was more expensive, everyone one would be the equal, but cheaper one. The best example I can think of it agriculture. All farmers goods are usually considered equal to another farmers.

Answer 2

A market is a place where a transaction takes place between  buyers and sellers.In case the transaction is taking place in a free andfair manner with no outside interference like govt. then it is a perfectly competitive market.Only the market forces of demand and supply determine the price of the product.

Let us suppose the perfectly competitive market is determined with the factor 1. All the markets are less than 1. The closer the market is to 1 the more competitive it is.It depends on many factors like numbers of buyers and sellers ,their disposable income,the type of market etc. The ice cream is generally.a highly competitive market . But it depends which country you are talking about.The American market will be more competitive than Indian market in this product.Whether you are talking of local area or national market.You must be more specific.