Checking competitors: what and how to analyze correctly
Posted: Thu Jan 23, 2025 4:25 am
Despite the practical impossibility of perfect competition, this concept is widely used in economic theory to illustrate two radical options - a market with an infinite number of buyers and sellers and a monopolistic market where there is only one producer.
Between these extremes are intermediate varieties, from a duopoly, where two sellers operate, to monopolistic competition.
This creates opportunities for modeling guatemala telegram number database market situations and the behavior of participants in various conditions, which contributes to the progress of economic science and more accurate forecasting of changes in the real market.
Initially, perfect competition was perceived by economists, in full agreement with its definition, as an optimal, perfect market model, with more advantages than disadvantages. However, now the disadvantages inherent in this system have become clear.
Practice of applying the concept of perfect competition
Source: George Dagerotip / unsplash.com
Firstly, the development of technologies, conducting scientific research with subsequent implementation of their results in production - all this is not feasible within the framework of perfect competition. Modern high-tech companies invest huge amounts of money in R & D: such projects are beyond the capabilities of a small manufacturer.
Secondly, the level of needs is steadily growing, and in order to meet it, sellers must make improvements to the product, offer new products, which does not fit into the conditions of a perfectly competitive market.
Between these extremes are intermediate varieties, from a duopoly, where two sellers operate, to monopolistic competition.
This creates opportunities for modeling guatemala telegram number database market situations and the behavior of participants in various conditions, which contributes to the progress of economic science and more accurate forecasting of changes in the real market.
Initially, perfect competition was perceived by economists, in full agreement with its definition, as an optimal, perfect market model, with more advantages than disadvantages. However, now the disadvantages inherent in this system have become clear.
Practice of applying the concept of perfect competition
Source: George Dagerotip / unsplash.com
Firstly, the development of technologies, conducting scientific research with subsequent implementation of their results in production - all this is not feasible within the framework of perfect competition. Modern high-tech companies invest huge amounts of money in R & D: such projects are beyond the capabilities of a small manufacturer.
Secondly, the level of needs is steadily growing, and in order to meet it, sellers must make improvements to the product, offer new products, which does not fit into the conditions of a perfectly competitive market.