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2.1 Forms of Competition

There are many different forms of competition.

Many people think about competition in terms of the textbook model of perfect competition. Perfect competition is an ideal model of a competitive market, but is unlikely to occur in practice.

Markets that are not perfectly competitive can still deliver significant benefits for buyers and sellers. A useful standard for analyzing real world markets is workable or effective competition. The concept of contestability is also useful for analyzing markets in which there are few players but market power is constrained by the potential for entry.

Contents

2.1.1 Perfect Competition 2.1.2 Effective Competition 2.1.3 Market Contestability 2.1.4 Sustainable Competition

Last updated 06 Sep 2008

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