Difference between perfect and imperfect competition

1. Name: Yashu Sharma
Roll no : 75
Class: B.B.A
College: I.P (P.G) College,
Campus 2 Bulandshahr

2. Presentation Topic:
Difference betweenperfect and
imperfect competition

3. PERFECT COMPETITION
DEFINITION :
Perfect competition describes a market structure
where competition is at its greatest possible level.To
make it more clear, a market which exhibits the
following characteristics in its structure is said to
show perfect competition:

4. FEATURES OF PERFECT
COMPETITION
 1. Large number of buyers and sellers
2. Homogenous product is produced by every firm
3. Free entry and exit of firms
4. Zero advertising cost
5. Consumers have perfect knowledge about the
market and are well aware of any changes in the
market. Consumers indulge in rational decision
making.

5. 6. All the factors of production, viz. labour, capital,
etc, have perfect mobility in the market and are not
hindered by any market factors or market forces.
7. No government intervention
8. No transportation costs
9. Each firm earns normal profits and no firms can
earn super-normal profits.
10. Every firm is a price taker. It takes the price as
decided by the forces of demand and supply. No
firm can influence the price of the product.

6. IMPERFECT COMPETITION
 DEFINITION :
Imperfect competition is a competitive market
situation where there are many sellers, but they are
selling heterogeneous (dissimilar) goods as opposed to
the perfect competitive market scenario. As the name
suggests, competitive markets that are imperfect in
nature.

7. FEATURES OF IMPERFECT
COMPETITION
 Imperfect competition refers to any economic market
that does not meet the rigorous assumptions of a
hypothetical perfectly competitive market.
 In this environment, companies sell different products
and services, set their own individual prices, fight for
market share, and are often protected by barriers to
entry and exit.
 Imperfect competition is common and can be found in
the following types of market structures: monopolies,
oligopolies, monopolistic competition.
 Economists generally agree that real-world markets
rarely meet the assumptions of perfect competition, but
disagree as to how much of a substantial difference this
makes for market outcomes.


8. PERFECT COMPETITION V/S
IMPERFECT COMPETITION
PERFECT COMPETITION
 When the condition is not met, it
is considered imperfect
competition.
 The markets we have in real life
are all imperfect.
 While in the case of imperfect
competition, there can be few to
many players.
IMPERFECT COMPETITIUON
 In a competitive market where there
are many buyers and sellers, the
sellers sell identical products to the
buyers, then it is known as perfect
competition.
 Perfect competition is theoretical; it is
impossible to find a perfectly
competitive market. Perfect
competition is usually used as a
standard; it has no real-life example.
However, there are inferences the
market players may get from the
conditions of perfectly competitive
markets.
 In the case of perfect competition,
there are always many players in the
market.

9. PERFECT COMPETITION
 While the sellers in the case of an
imperfectly competitive market sell
non-identical products.This means
that sellers in the imperfectly
competitive market choose their own
specialties according to their
knowledge and choice.
 In imperfectly competitive markets,
the barriers to entry not only exist but
may also be very high so that no new
participant may easily enter the
market.
 In the case of imperfectly competitive
markets, the sellers can decide the
prices so they are price makers.
IMPERFECT COMPETITION
 In a perfectly competitive market, the
sellers sell identical products.
 There are no barriers to entry and exit
in the perfectly competitive market
which is not true in the case of non-
competitive markets.
 In the case of a perfectly competitive
market, the sellers cannot decide the
price of the products.The prices are
set by market forces. So, the sellers
are price takers in competitive
markets.

10. CONCLUSION:
All markets in the world are imperfect and as we know there are many
instances in which no condition of perfect competition is obeyed by
market participants.The real markets run in the profit motive and the
players in it are interested in making the maximum profit possible.
Therefore, they do not obey the conditions of perfect competition.
However, perfect competition is a good theoretical condition that may
be taken as a reference to make the real markets as justified as
possible. By following the conditions of perfect competition, the
markets may be made to conform to the best possible norms. However,
in day-to-day life, no company is interested in following the conditions
of perfect competition.

11. Thankyou ❣️