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The article examines correlation between the existing principles of state competition policy and innovative economic development. A perfect competition model has been currently adopted as an ideal sample of the commodities market state, being characterized by a sufficient number of sellers and buyers, when none of them can decisively influence market prices. Consequently, countries endeavor to bring real markets conditions closer to this ideal state by competitive policy, that occur in dedicated state effort to reduce the market share of enterprises, including through their direct unbundling (fragmentation). Theoretical studies justify the position that the perfect competition market provides the best conditions for consumers to acquire goods by low prices, high standards of quality and service, intensive deployment of innovations by sellers, etc. However, the dedicated state effort to reduce the scale of activity of market actors patently contradict with the innovative economic development, as a number of modern empirical studies shows. Among these, the works of David L. Birch shows that the greatest innovation activity is inherent for gazelle companies, foremost among them, medium-sized businesses. According to studies based on the works of David L. Birch, such enterprises, representing from 3 to 10% of market participants, give about 50-80% of market capacity. Obviously, such a market structure does not meet the criteria of perfect competition market and rather relates to oligopolistic market, which is one of the types of imperfect competition market, according to the current classification of markets based on currently dominating structural approach. Another proof of negative impact of low market concentration on innovation (including the perfect competition market) lies in an inverted U-shaped relationship between the structure of the market and the degree of its participants' innovative activity. According to this dependence, there are medium-sized enterprises, but not small or large businesses, that are more innovative. These findings are also confirmed by other studies. Therefore, modern competition policy needs significant transformation by identifying the target market state, which will be the most effective. Obviously, this market state should ensure intensive development of innovations. [ABSTRACT FROM AUTHOR]

This paper analyzes the process of determining the optimal quantity of production and the price of a product in different market structures. This difference arises from different slopes of demand function in different market structures, which is directly connected to the level of market power. The aim of this paper is to show in theory and on numerical examples how firms determine prices. Assuming that every firm aims the profit maximization, and comparing firms in different market structures, but under the same conditions in terms of the cost of production and optimal output, models will show how prices change from perfect competition to monopoly. Steeper demand curve and from it derived marginal revenue curve indicate higher market power and greater possibility for a firm to raise the price. [ABSTRACT FROM AUTHOR]

Upstream fuel markets can affect the production strategies of power producers, and further the market equilibrium, as well as the social welfare. In this paper, we present a study on the impacts of fuel price on electricity market in perfect and imperfect competitive environments. The differences between the power producers' strategies, and benefit transference among different market participants under the effect of fuel price are investigated and compared. It is found that fuel-dependent power producers' production responses with respect to the fuel price are similar in these two competition markets, but the incentives are very different. Moreover, the production strategies of non-fuel-dependent power producers have different effects on the fuel producer's profit. In addition, we show that the essence of the upstream fuel market's impact on the social welfare in the downstream electricity market is benefit transference among the producers, as well as between the producers and consumers. [ABSTRACT FROM PUBLISHER]

This paper presents a perfect competition model of an electricity market that takes into account the starting-up, shutting-down and commitment variables. These variable are modeled through binary variables. The use of binary decision variables makes the cost functions discontinuous and dual variables questionable as equilibrium prices. If the market prices were set to the value of the dual variables, some units could have operational losses; and these units would rather not to enter in the market. In order to solve this problem, this paper proposes a methodology that find the market solution using a cost minimization problem. The cost-minimization problem is first solved taking into account the integratility of the binary variables, and then it is solved relaxing the binary variables. A third optimization problem is used to eliminate the differences between both solutions. This methodology can be seen as a stylized representation of sequential markets. Finally, the proposed methodology is validated through a numerical example. [ABSTRACT FROM PUBLISHER]

Competition's existence in the market for goods and services is not only a major concern of economists around the world, but also of all states, especially in recent years. This is because internal competition between national operators or between them and the foreigns help boost international competitiveness. It is known that economic autonomy gives economic operators their freedom to choose the economic field in which they invest capital, in setting strategies for achieving their activities and, secondly, private property is the one that stimulates the process of consolidating the market positions held by business, the one that mobilizes all its resources to streamline business and ultimately provides the fundamental achievement, maximize profit (short term) and enterprise value (long term). However, within the competitive process, some traders win, others lose. It is, however, a normal phenomenon specific to the market economy as through the protection of competition it is not looking to protect those adversely affected by competition, but to ensure the normal completion of competition, in terms of loyalty and fairness, and the orientation of the economy as a whole toards progress and welfare. The concern of economists to define the optimal framework for expression of competition between operators and to determine the most appropriate rules governing economic activities based on principles of competition is not a new attempt, this concern appeared even in the ideology of the classical theory from which it has evolved and acquired several forms along with the development of society. [ABSTRACT FROM AUTHOR]

The article reports on research which was conducted in an effort to investigate the role that frictions and rivalry played in the emergence of heterogeneity in business enterprises and to develop a friction parameter which could be used to investigate impediments to perfect competition in the industrial product market. Researchers found that in business enterprises there are complex interactions between elements usually thought of as playing out at different levels of analysis. They also found that mapping between value creation and value capture is moderated by industry-level factors and that firm heterogeneity depends both on features of the resource development process and on features of the industry.

The credit card industry of the 1980s was viewed with great interest because as an industry with over 4000 firms selling an almost identical product, it should be expected to behave like a text book example of an industry in "Pure or Perfect Competition". Until 1992, it did not. Product pricing, as measured by the card issuer's Annualized Interest Rate (APR) showed no sign of significant decline when most other bank interest rates declined due to reduced funding costs. In 1992, everything changed and price competition became the primary competitive tool used and industry interest rates began to decline. Three forced coalesced together to create this shift: 1.) the unique characteristics of the 1992 recession; 2.) the ongoing presidential campaign highlighting health care reform; and, 3.) the existence of some issuers who had a "variable" vs. "fixed" interest rate. These factors working together caused the typical revolving credit customer to view their credit card interest payments as something that needed to and could be managed, which in turn dramatically changed issuer's card positioning and prices. [ABSTRACT FROM AUTHOR]