Meaning & use
pure competition
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Meaning
noununcountabletechnicalbusiness
A market situation with many buyers and sellers of an identical product, where no one can control the price.
Grammar: Usually uncountable: under pure competition. It can be countable in the phrase 'a pure competition market', but that is less common.
Patterns
- under pure competition
- a pure competition market
- in pure competition
In pure competition, each firm is a price taker.
The agricultural market is often used as an example of pure competition.
Under pure competition, no single seller can influence the market price.
Common combinations
- under pure competition
- Under pure competition, firms earn normal profits in the long run.
- pure competition market
- A pure competition market has many small sellers.
- model of pure competition
- The model of pure competition assumes perfect information.
Synonyms and how they differ
- perfect competition
- This is the more common term in economics; 'pure competition' is a near-synonym but sometimes used for a slightly less strict model.
Opposites
Commonly confused: pure competition or perfect competition?
pure competition vs perfect competition
Perfect competition is the standard economic model; pure competition is often used interchangeably but can refer to a simpler version.
Practice
Which situation best describes 'pure competition'?
Choose one answer.
Pure competition means many sellers with identical products and no price-setting power. A single controller is a monopoly, a few firms are an oligopoly, and government price-setting is regulated pricing.
Make it your own
Write a sentence using “pure competition”, then check it and compare it with the examples above.