Perfect Market : It is a market situation when there are large number of buyers and sellers and the product is homogeneous. All the buyers and sellers have perfect knowledge of market conditions. There is no restriction on the entry and exit of the firms.

“Perfect competition prevails when demand for the output of each producer is perfectly elastic. ”

– Robinsons 

Features of Perfect Competition :

1. Large Number of Buyers and Sellers : There exists a large number of buyers and sellers. No individual buyer or seller can influence the demand of product in the market. 

2. Homogeneous Product : All firms produce homogeneous product. All the sellers have to sell their product at a uniform price. If any of the sellers sells his product at higher price, his product would become out of market. 

3. No Restriction on Entry and Exit : All the firms are free to enter and exit the market. There is a free mobility of sellers. 

4. Perfect Knowledge of Market : All the sellers and buyers have perfect knowledge of market conditions. There is a free mobility of buyers and sellers in the market. Factors of production also have free mobility. 

5. Absence of Selling and Transportation Costs : In the perfect competition, it is assumed that producers and sellers are closely situated and there are no selling and distribution costs.