Example of Pure Competition

Also known as 'perfect competition'. This theory defines a marketing in which common products are sold to consumers by multiple sales sources. In this market, no seller is large enough to distort the market by offering significantly lower prices. The sellers are all working with the same materials, competition is therefore high, and pricing is based on competitive forces. This is a largely idealized form of basic competition theory, in which prices are created and kept down by the nature of the market.