WRITE AN ESSAY that discusses the case for and against Kriss’s view that ‘business competition is becoming more like the economic model of perfect competition’.

br The single most important concept in the history of economic analysis is perfect competition ' - Peter Cochrane (Machovec 1995 ,

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Kriss holds the view that business competition is becoming more like the economic model of perfect competition . However , in this essay I will argue the case both for and against Kriss 's view that business competition is becoming more like the economic model of perfect competition while providing supporting evidence for both sides of this issue

There are a variety of definitions out there on what exactly the theory

of perfect competition is . One such definition defines that the theory of perfect competition holds that profit rates should fall to zero when consumers have perfect knowledge of the characteristics of products and the prices at which they are available (Lycos ,

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Perfect competition can also be defined as an economic model describing a hypothetical market form where no producer or consumer has the market power to influence prices . Accordingly , this perfect competition would then lead to a completely efficient outcome (Wikipedia ,

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Kriss states that With the growth of on-line shopping , price comparison websites and falling prices for many consumer goods in recent years , I think business competition is becoming more like the economic model of perfect competition (Kriss

In supporting Kriss 's statement , I feel it is important to point out he is not stating that business competition has become the economic model of perfect competition , but that business competition is becoming more like the economic model of perfect competition (Kriss

This statement can be supported by the fact that perfect competition ' can become in reality much easier now with the Internet More data can be easier obtained as negotiation advantages are shifting from the seller to the buyer in this electronic age . Companies can expect greater competition , increased commoditization along with a reduction in profit margins - hence , making a knowledge shift a power shift (Perfect , tutor ,

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Years ago a colleague of the technology-driven business strategist Peter Cochrane stated , The Internet would produce a world where if we wanted something we would just put a tender out on the net and then accept the lowest bidder (Quinn , 2005 ,

.1 ) There are signs that this is what is happening now which can be used as another indicator of perfect competition

For competition to be defined as perfect competition ' by definition , there are five parameters to be fulfilled : atomicity homogeneity , perfect and complete information , equal access and free entry (Machovec , 1997 . The Internet is helping to make all of these parameters more and more a reality for today 's consumers

When a market is perfectly competitive there is productive efficiency and allocative efficiency both exist . An example of allocative efficiency would be when the price of an item is equal to the marginal cost . This makes the item available to the consumer at the lowest possible price

Kriss 's view can also be supported in that the closest thing to a perfectly competitive market would...