ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Under perfect competition, there are many buyers and sellers, and prices reflect supply and demand. Companies earn just enough profit to stay in business and no more. If they were to earn excess profits, other companies would enter the market and drive profits down.

Detailed explanation-2: -a marketing situation in which there are a large number of sellers of a product which cannot be differentiated and, thus, no one firm has a significant influence on price. Other prevailing conditions are ease of entry of new firms into the market and perfect market information.

Detailed explanation-3: -Pure or perfect competition is a market structure defined by a large number of small firms competing against each other. A single firm doesn’t have significant marketing power, and as a result, the industry produces an optimal level of output because firms don’t have the ability to influence market prices.

Detailed explanation-4: -Perfect competition occurs when there are many sellers, there is easy entry and exiting of firms, products are identical from one seller to another, and sellers are price takers.

Detailed explanation-5: -Perfect competition is a type of market where there are many buyers and sellers, and all of them initiate the buying and selling mechanism. There are no restrictions and no direct competition in the market as all the sellers are assumed to sell identical or homogenous products.