ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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.

Detailed explanation-2: -What Is an Example of Perfect Competition? Consider a farmers market where each vendor sells the same type of jam. There is little differentiation between each of their products, as they use the same recipe, and they each sell them at an equal price.

Detailed explanation-3: -The best examples of a purely competitive market are agricultural products, such as corn, wheat, and soybeans. Monopolistic competition is much like pure competition in that there are many suppliers and the barriers to entry are low.

Detailed explanation-4: -Perfect competition is a hypothetical market where there are a large number of buyers and sellers selling homogeneous products. This indicates that all the products are perfect substitutes for each other. All the sellers sell the product at a uniform price.