In order to comprehend the ontological construction below, please refer to the respective posts for all notions in italic.
In perfect competition, the commodities are traded with no niching and limits on rivalry. The specific nature of goods, in accordance with the monopolistic competition, is neglected, as they are substitutes nonetheless, so they can replace each other in their market shares. Several entrepreneurs are capable to deliver the goods and compete for the business; several consumers are eager to consume the goods and compete for the privilege. Individual suppliers cannot determine the quantity of commodities on the market, and the individual buyers cannot determine the prices.
Historical Backdrop
• ADAM SMITH Wealth of Nations: the system of natural liberty.
• AUGUSTIN COURNOT Researches into the Mathematical Principles of the Theory of Wealth: unlimited competition.
• FRANCIS EDGEWORTH Mathematical Psychics: perfect market.
• PIERO SRAFFA The Laws of Return under Competitive Conditions: competitive conditions.
• EDWARD CHAMBERLIN The Theory of Monopolistic Competition: pure competition.