ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The correct sequence of the market structure from most to least competitive is perfect competition, imperfect competition, oligopoly and pure monopoly.

Detailed explanation-2: -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-3: -A perfectly competitive market is a hypothetical extreme. Producers in a number of industries do, however, face many competitor firms selling highly similar goods, in which case they must often act as price takers. Agricultural markets are often used as an example.

Detailed explanation-4: -Key Takeaways Perfect competition is an ideal type of market structure where all producers and consumers have full and symmetric information and no transaction costs.