What features exist for a fish market in perfect competition?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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Any market that is in perfect competition will have to have the same features.  This is because perfect competition is only possible in a very limited set of circumstances.  Any market that is in perfect competition must have the following features:

  • Easy entry and exit.
  • Many competitors.
  • Homogeneous product.

If, when you say “fish market” you mean a place where fish are bought and sold, it is unlikely that such a firm could be in perfect competition.  Fish markets are only really viable in places where many fishing boats unload their catches.  This means that there cannot be very many competitors or easy entry to the market.

If you mean the market for a certain kind of fish, perfect competition is much more likely.  Let us say that the fish is not terribly hard to catch.  Fishermen would not need to buy huge ships to catch that kind of fish so there could be many competitors and easy entry to the market.  The product would be homogeneous for the most part because all fish of the same species could be of roughly the same quality.  The market for this species of fish would, therefore, be in perfect competition.