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In a way, stock markets are an example of perfect competition. There are hundreds of buyers and sellers. When buying shares you can choose from innumerable different brokers. ... There are few barriers to entry and exit; anybody can buy shares if they have enough money.
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JudyStock Market is an example of perfect competition where the buyers and sellers are free to do business with one another. The market forces of supply and demand, incentives, and prices help shape the economy.
Stock market is not a place where you just buy or sell stocks - it's also a place where people can earn money. You can make money on your own investments or through stocks you buy and sell on the exchange. In this way, people in stock market have a chance to diversify their portfolio while they are earning some profit.
In this competitive environment, the price of stocks fluctuates depending on supply and demand which creates an opportunity for more investors to enter into the market by buying stocks that have been trading at lower price tags because they have just been released from bankruptcy or bankruptcy protection plan
The stockarket is an example of perfect competition in that everyone has the same chances of ups and downs in a certain market. Laws also help to ensure it's perfect competition by makin insider trading illegal.
In theory, a stock market is perfect competition. However, in reality, it is actually an example of very poorcompetition. Both in laws and in actual construction, stock markets heavily favor those able to purchase super-high-speed computers (and host them in the exchange itself), and also tend to restrict information to a privileged few while denying it to the majority of users. The consequence is that a stock market actually is very imperfect competition, heavily favoring the established members of the exchange over the ordinary exchange trader.
Answer 2
It isn't. As a technical term in Economics, "perfect competition" is the (ideal or theoretical) market structure characterised by a large number of price-taking producers with identical U-shaped cost curves (the minimum of the firm cost curve occurring at an output small in comparison with market demand), who face no barriers to entry, producing a uniform product and selling it to a large number of price-taking consumers, without collusion or price-discrimination.
The stock market is characterised by non-uniform commodities (shares in different companies) each with a monopoly supplier. If anything it's an example of monopolistic competition, not perfect competition.
It is not such an example. There is not perfect information, there is not equal access, and there are institutionalised market modifiers, to name just three imperfections.
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Does Indian Stock Market explain perfect competition?
no
To what extent does perfect competition exist n reality?
It doesn't. there is no such thing as perfect competition. who will know everything about a product if he/she doesn't go research? how can there be totalhomogeneousproduct for sale without differentiation (e.g china soya bean, US soya bean).Some market structure however do exhibit such system like stock market where you can easily get your hands on all the information required online.
Any present or past examples for Monopoly and perfect competition?
Petrol Bunks are best example for perfect competition.The reason is all sellers sell same product with same price .The product differences if any is also same (like ordinary petrol /diesel & extra premium petrol /Diesel) Stock market also exhibits perfect competition. In oligopoly market there are different sellers with product differential being wide in terms of technology & price. E.G, Mosquito repellents ,where cotton nets with repellent coating, coils, electronic repellents, repellent frequency sound wave repellents are seen in markets .Buyers who are rich will buy costly repellents & others will buy low priced items. Monopoly market represent single seller & many buyers. LIC India enjoyed for many years monopoly in Life Insurance market. Railways in India is monopoly controlled by Central Government Railway Ministry . similarly petroleum product distribution is dealt by Petroleum ministry. Oil & Natural Gas Commission is having monopoly. Any producer with break through technology offers a product or service having no competitors enjoys monopoly. For sometime Maruti Udyog Ltd enjoyed monopoly over their spare parts.
Is stock exchange an example of perfectly competitive market?
Yes
How does the buying and selling of stock fit the model for perfect competition?
Transacting stocks is a competitive system in which firms produce a homogenous product for a large number of buyers.
