In the last instruction we talked about "perfect competition." The concept of perfect competition helps us understand how prices are affected by supply and demand. However, this situation rarely exists in the real world.
.The prices people pay for food, clothing, housing, entertainment, and other things are not set in a perfectly competitive market. Instead, these prices are subject to various kinds of competition.
Markets can range all the way from perfect competition, where there are all kinds of buyers and sellers, to a monopoly, in which one seller controls the entire supply of a good or service.