What is a perfect competition?

1 Answer
Nov 30, 2015

Perfect competition is a market form in which there are a large number of buyers and sellers.

Explanation:

The following conditions are to be full filled by a market form for it to be called as a perfectly competitive market.

1 There are large number of buyers and sellers.

2 All the firms are producing homogeneous product.

3 Single price is ruling in the market.

4 The distinction between firms and industry is there.

5 Buyers and sellers possess perfect knowledge.

6 There is free entry and exit of firms.

7 There is no transport cost.

8 There is no government control.