Saturday, September 15, 2018

Perfect Competition

Perfect competition is a market situation where there are a large number of buyers and sellers, buying and selling homogenous products where no single buyer or seller can effect the price or demand of a good or service

Features of perfect competition-

1) large number of buyers - there are a large number of buyers so no single buyer can affect the demand of any particular product.

2) large number of sellers - there are  large number of sellers so no single seller can affect the price of a particular good or service.

3) homogenous products - all the goods and services are identical in nature

4) free entry and exit - There is no barrier to entry or exit.

5) perfect knowledge - Both buyer and sellers have perfect knowledge about the prevailing price of any goods or services in the market.

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