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State And Competition In A Market Economy


  • Gheorghe Pirvu

    (University of Craiova Faculty of Economics and Business Administration)

  • Cosmin Floreanu

    (University of Craiova Faculty of Economics and Business Administration)


In first part of this paper will be presented the concept of competition, we will define and point the main objective of competition, all stages through the competition may be emphasized, the main purpose of competition and also the function of this. Also we present the characteristics of market with perfect competition. A major theme, including from the perspective of economic integration steps, is represented by the position of state versus the major problems from competion of bussiness enviromental. The competitonal behaivior derive from the nature of economic system based on the market rules; rationality considerations require from each company not only traking the abstract and unilateral interest, but an concret and continuos interest, consisting in obtaining of competitional advantages compared with the competitors, as: market quota, thechnologoival development, offered services. The competition este the active form of free initiative, this free initiative generated by private property, who forms at this turn the essential feature of the market economy, whose mechanism is the competition. The competition represents the open confrontation, the rivalry beetwen economic agents, sellers for attracting the customer on thier side. In the second part of this paper will be presented the regulating role of the state in competition mechanism, the importance of this role of the state. Current economic theory has shown that the state role in regulating of the economy is based on two considerations: the absence of perfect competitions and absence of “invisible hands” self-regulating of market in real economy The regulation role of state is dublu: regulator of competition and regulator of equilibrum. The regulation role of state is based on market malfunctions.

Suggested Citation

  • Gheorghe Pirvu & Cosmin Floreanu, 2011. "State And Competition In A Market Economy," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 1(39), pages 160-167.
  • Handle: RePEc:aio:aucsse:v:1:y:2011:i:39:p:160-167

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    More about this item


    competition; economy; equilibrum; market; rationality; state;

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition


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