Municipal public utilities reform is an important part of the economic system structural reform of cities. In this paper a kind of market competition mechanism for commercial municipal public enterprises is proposed; a price competition model of municipal public enterprises with similar products is founded; its static and dynamic game analysis is offered and a comparison between them is made. The results show that,for the business type of municipal public enterprise market competition mechanism can be introduced to mobilize the enterprise activity to raise the end of efficiency; the government may control the market price through the economic measures of regulating the amount of subsidy;that enterprises enter the market and select the price simultaneously is more advantageous than entering the market one after another in general, information among the municipal enterprises is symmetrical (the equilibrium is lower); "following enterprises" gets "second mover advantage";to raise the difference of the same product will increase the profit of enterprise.
