COMPETITION AND CONCENTRATION IN MARKETS
In the classic economic model, a competitive market includes many producers that sell similar products. Consumers have good information about product attributes and prices. Producers that sell at prices above the market will not be able to remain in business. The demand for goods and services in this type of market is highly elastic, meaning that if a producer decreases its prices, buyers will quickly shift toward purchases from this low-price firm. The reverse would happen to producers that did not respond to the decrease. In a competitive market, if a producer does not quickly match a drop in the market price, it will be unable enough to remain in business