ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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.

Detailed explanation-2: -In a perfect competition model, there are no monopolies. This kind of structure has a number of key characteristics, including: All firms sell an identical product (the product is a commodity or homogeneous).

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