A competitive market is any market for a good where there are so many buyers and sellers that any one buyer or seller has a negligible ability to affect the price of the good. An example of a non-competitive market is a monopoly, in which there is only one seller, so the seller has a much greater affect on the price of the good. For example, monopolists can charge higher prices for a good because they know that buyers will have a difficult time finding that good elsewhere.
Work Step by Step
In general, a competitive market is so large that no one buyer or seller can affect the price of a good. Buyers know that there are many sellers, so if a seller attempts to raise the price of the good, buyers will choose to do business with one of the other sellers of that good who is selling the good at the original price. Similarly, there are so many buyers that buyers can not demand a lower price for the good, as their business makes up a small fraction of the total market.