Perfect competition is a theoretical market structure defined by many buyers and sellers, negligible impact of individual firms on market price, homogeneous products, and freedom of entry and exit. Firms are price takers and must accept the market price determined by industry supply and demand. The model assumes large numbers of firms and homogeneous products competing to sell goods with supply and demand determining price equilibrium across the industry.

1. Perfect Competition

2. Perfect Competition
 The concept of competition is used in
two ways in economics.
 Competition as a process is a rivalry among firms.
 Competition as the perfectly competitive market
structure.

3. Competitive Markets
A competitive market is a market in which there are
many buyers and sellers so that each has a negligible
impact on the market price.

4. Market Structures

5. Perfect Competition
• It is a theoretical model.

6. Perfect Competition
 Assumptions:
 Large number of firms.

7. Perfect Competition
 Assumptions:
 Individual firms are “price takers”.

8. Perfect Competition
 Assumptions:
 Homogeneous products.

9. Perfect Competition
 Assumptions:
 Freedom of entry and exit.

10. Demand curves for industry and firm in
perfect competition
 Industry:
 Normal demand and supply
curves.
 More supply at higher price and
less demand and higher price.
 Firm:
 Price takers.
 Have to accept the industry
price.

11. Differencce

12. Thank You For Your
Attenation…!!!

13. Any Question.?