A perfect competition market can be defined as being a hypothetical market setting that is rare in a real sense. It is argued as being a market structure that would lead to the best results. Under this structure, there is perfect knowledge by all market players thus implying that there no information lags or failure. The fact that both the buyers and the suppliers have access to information implies that there is the making of rational decisions. Another feature is that there are no barriers of either entering or leaving the market. However, many businesses are opposed to thus structure despite the view that it would lead to efficient market operations.

It is always the objective of a business to gain a competitive advantage over other market players. Business is painted as being in a struggle to adopt better technologies, access raw materials and other factors that may improve the operational processes. Additionally, there is a tendency to conceal confidential information (Kirzner and Israel, 2015). In a perfect competition setting, it would imply that all market players have equal access to raw materials, similar technologies, and information. It means that all organization would have similar operations and products.

While this structurewouldlead to market efficiency, there is the view that it would curtail the freedom of individual business. Many businesses are keen on maintaining their freedom and authenticity. Contrary to producing similar products, there is often emphasize the need to produce distinctive products as a way of capturing a largercustomer base. Lastly, the lack of governmentregulations implies that there would be the prevalence of illegal activities and violation of laws that regulate business operations(Kirzner and Israel, 2015). Businesses require a stable environment that is monitored and controlled by the government.

Work Cited

Kirzner, Israel M. Competition and entrepreneurship. University of Chicago Press, 2015.

 
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