Competitive Market

Definition

A competitive market is a market structure where there are many buyers and sellers, each having negligible influence on the market price. It allows for free entry and exit of firms, leading to competition and efficient allocation of resources.

Related terms

Perfect Competition: A type of competitive market where there are many small firms producing identical products.

Demand and Supply: The forces that determine the price and quantity in a competitive market.

Equilibrium Price: The price at which the quantity demanded equals the quantity supplied in a competitive market.