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Explain the features of Perfect Competition Market.

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The features of "Perfect Competition Market". 

(i) Innumerable Buyers and Sellers : In this type of market the number of sellers (producers) are in large number, therefore the production of a single producer is a very minute fraction of the total supply of market. Hence, the single firm is unable to effect the supply and price of the market. In the same way the number of consumers are also innumerable, therefore demand of a single consumer is a very minute fraction of total demand of the market. Hence the single consumer is also unable to effect the demand and price of the market. 

(ii) Homogenous Commodity : The commodity produced by different firms is identical in every aspects, such as, shape, size, colour, texture, trademark, brandname, weight, taste, packaging, etc. It means that the commodity produced by different firms is perfect substitute, therefore consumer is unable to distinguish between the commodity produced by different firms. Therefore there is no personal attachment of buyers with a particular firm. 

(iii) Selling Cost is Absent : In this type of market the selling cost (cost on sales promotion, such as advertisements, etc.) is absent because the commodity produced by different firms is identical in every aspects, there is no mark of identification on commodity. Therefore producer is unable to distinguish its commodity from other firms. Therefore expenses made on advertisements is a wasteful expenditure. 

(iv) Free Entrance and Exit : In this type of market the entrance and exit of the firm in the market is free, means there is no restriction in entrance and exit of firms. Any firm can enter in the market by starting the production of commodity or can leave the market by shut down the production process.

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