Page 103 - F1 - AB Integrated Workbook STUDENT 2018-19
P. 103

External analysis – economic factors




               6.4  Types of market

                    A perfect market exists when the following criteria are met:

                     –     Large numbers of customers and suppliers – none of whom have the
                           power to dominate the market.

                     –     The products or services sold by all suppliers are identical (homogenous).

                     –     There is perfect information – all customers and suppliers have complete
                           information on the prices that goods and services are being sold at
                           elsewhere in the market.

                     –     No barriers to entry to, or exit from, the market – that is, competitors can
                           easily enter and exit the market.

               This is seen as being the ‘ideal’ market position.  If any of the factors above do not
               hold true, the market is described as imperfect.  In the real world, most markets are
               imperfect.



















































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