![]() ![]() The technical characteristics of the products and the services associate with its sale and delivery are identical. In other words, the products in the industry are homogeneous. All firms are producing a similar product. ![]() Hence they are also the ‘price takers’ in the market. There are a large number of buyers in the commodity market.Īs for the sellers, buyers also cannot make any significant influence on the market price by their individual decisions. The firms are known as ‘price takers.’ They accept the price decided by the market. Therefore, a single firm will not have any perceptible influence on the market price of the commodity and for the market supply. The quantity supplied by each firm or seller is too small compared with the size of the market. There are a large number of sellers/firms inside the industry. What Is Perfect Competition?Īn industry or market is said to be operating under perfect competition if the following conditions are satisfied: 1. Now firstly let’s look at the conditions that a perfect competitive market must meet. According to these criteria, we can easily identify four key market structures.
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