ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In economic theory, perfect competition occurs when all companies sell identical products, market share does not influence price, companies are able to enter or exit without barriers, buyers have perfect or full information, and companies cannot determine prices.

Detailed explanation-2: -In pure competition, all products are similar. Products may all appear to resemble each other in packaging, color and shape without being exactly identical. Since products are alike, buyers may not have product preferences and often will purchase all products equally.

Detailed explanation-3: -Perfect Competition-Buyers and sellers sell identical products (there is no need for advertising).

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: -In a perfectly competitive market: all firms sell an identical product; all firms are price-takers; all firms have a relatively small market share; buyers know the nature of the product being sold and the prices charged by each firm; the industry is characterized by freedom of entry and exit.