Title: What is the difference between pure and perfect competition? - Quora
Headings: What is the difference between pure and perfect competition?
What is the difference between pure and perfect competition?
Content: Perfect Competition
"Pure or perfect competition is a theoretical market structure in which the following criteria are met: all firms sell an identical product (the product is a "commodity" or "homogeneous"); all firms are price takers (they cannot influence the market price of their product); market share has no influence on price; buyers have complete or "perfect" information – in the past, present and future – about the product being sold and the prices charged by each firm; resources such a labor are perfectly mobile; and firms can enter or exit the market without cost." In order to meet these criteria, there have to be a very large number of firms, all have the same cost of production, and nobody should be able to differentiate their product. Because there have to be a large number of firms in any industry, economies of scale are not allowed. This limits competition to simply price competition, with all of these numerous firms competing to see which can shave their profit margin the thinnest, selling their product for the smallest increment above the cost of production possible.