Perfect Competition and Laptop Market


PerfectCompetition and Laptop Market

PerfectCompetition and Laptop Market

Perfectcompetition is a market that is characterized by the existence ofmany sellers in the market as well as many buyers. The number ofbuyers and sellers is large, and in such a manner that the decisionof one player on either side does not influence the market. Moreimportantly, the price is set by the market forces of demand andsupply (Mankiw, 2014). To understand these characteristics in apractical scene, I reviewed an HP laptop computer as a product in theperfectly competitive market. The laptop is manufactured byHewlett-PackardCompany(HP). HP is a company that operates in the laptop and computer marketthat portrays the characteristics of perfect competition.

Oneof the main features portrayed in the computer market that HPoperates on is the existence of many sellers and buyers. There aremany companies that produce and sell the same computer products thatHP produces. Taking the laptop market, for instance, there areplayers in the United States and global market that competes with HP.A few of these include Apple Inc, Dell, Toshiba, Samsung and Aceramong several other players. Therefore, the decision of HP does notinfluence the price of supply in the market. At the same time, thebuyers are many, in the United States and globally.

Themarket also portrays the feature of the price mechanism, where pricesare set by the forces of demand and supply. There is no governmentinterference in pricing and quality decisions of the market. At thesame time, the laptop computer market has a feature of free entry andexit, where the producers are at liberty to do so. This is becausetheir actions of entry or exist do not influence the market as thereis no barrier to entry or exit. The case of the HP in the laptopcomputer market illustrates the practical nature of the perfectcompetitive market.


Mankiw,N. (2014). PrinciplesofMicroeconomics.New York: Cengage Learning