ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Perfect competition, refers to a type of market where there are many buyers and seller that feature free barriers to entry, dealing with homogeneous products with no differentiation, where the price is fixed by the market. Individual firms are price taker as the price is set by the industry as a whole.

Detailed explanation-2: -Under perfect competition, there are many buyers and sellers, and prices reflect supply and demand.

Detailed explanation-3: -Perfect Competition They sell similar products (homogeneous), lack price influence over the commodities, and are free to enter or exit the market. Consumers in this type of market have full knowledge of the goods being sold.

Detailed explanation-4: -Perfect competition is a type of market where there are large number of buyers and sellers who deals in homogeneous product due to which no individual unit is able to influence the price of the product and the firms have to quote the price that prevails in the market because of the customer’s knowledge about the price.

Detailed explanation-5: -Perfect competition is a hypothetical market structure in which there are very many firms, each of which represents an infinitesimal share of the market. In a perfectly competitive market, if any firm is able to earn an economic profit, other firms will immediately enter the market, driving economic profit to zero.