Discuss the characteristics of perfect competition market

Perfect competition market: Perfect Competition is a marker structure where many firms offer a homogeneous product. Because there is freedom of entry and exit and perfect information firms will make normal profits and prices will be kept low by competitive pressures.

The characteristics of perfect competition market:

(i) Large number of buyers and sellers: Each firm in the industry produces a small portion of position output, and each consumer buys only a small part of the total.

(ii) Product homogeneity: The product- output of each firm is perceived by customers to be essentially the some as the product output of any other firm in the industry.

(iii) Free entry and exit: Firms are not restricted from entering or leaving the industry.

(iv) Perfect dissemination of information: Cost, Price and Product quality information is known by all buyers and sellers in the market.