The idea of pure competition is that there are so many independently acting sellers that each, because each is contributing an almost negligible fraction of the total supply, has virtually no influence over the supply or, therefor, the price - No Rigged Markets. The same reasoning applies to the demand side of the market. Buyers are plentiful and act independently. The widespread diffusion of economic power underlying competition controls the use and limits the potential abuse of that power. Competition implies it is simple for producers to enter or leave an industry.
Capitalism is a market economy.
The preferences of sellers and buyers are registered on the supply and demand sides of various markets, and the outcome of these choices is a system of the product and resource prices. These prices are guideposts on which resource owners, firms, and consumers make and revise their free choices in the furthering their self-interests. Limited Government - A competitive capitalist economy promotes a high degree of efficiency in the use of its resources. Consumer Goods are defined as goods that satisfy wants directly, while Capital Goods do so indirectly through the more efficient future production of consumer goods - machinery to pasteurize milk. Specialization also works on a geographic basis - regional or international.