ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Perfectly competitive markets must have the following characteristics: No barriers to entry and exit, no market influencers, homogeneous products, and complete product transparency.

Detailed explanation-2: -The three primary characteristics of perfect competition are (1) no company holds a substantial market share, (2) the industry output is standardized, and (3) there is freedom of entry and exit. The efficient market equilibrium in a perfect competition is where marginal revenue equals marginal cost.

Detailed explanation-3: -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-4: -Perfectly competitive markets have no barriers to entry and exit; a firm can freely enter or leave an industry based on its perception of the market’s profitability. In a monopolistic competitive market there are few barriers to entry and exit, but still more than in a perfectly competitive market.

Detailed explanation-5: -A large number of buyers and sellers. Homogenous products. Free exit and entry of firms. Perfect knowledge among buyers and sellers. No transport costs. Perfect mobility of factors of production. No promotional and selling costs.