Title: Why is perfect competition often described as the ideal market structure? - Quora
Headings: Why is perfect competition often described as the ideal market structure?
Why is perfect competition often described as the ideal market structure?
Alphons Ranner

Content: Otherwise, in case of monopoly or other market structures, there is generally a Deadweight loss for the economy which stems from high pric
Continue Reading
In a perfectly competitive market structure there exists : Perfect knowledge regarding the product by both buyers and sellers
No barriers to entry or exit of the firms
Homogenous product etc
But what is most important is that at perfect competition the price of the products are minimal which helps in creating huge demand by buyers and hence a large scale production as well. So, perfect competition helps in maximising the utility of the resources of the economy. Otherwise, in case of monopoly or other market structures, there is generally a Deadweight loss for the economy which stems from high prices. However, perfect competition is an ideal market situation which cannot be put into reality as in perfect competition the P=MC=AC which leads to economic profit zero in the long run which is illogical. Rob McRonald
, IT Project Manager (2003-present)
Answered 4 years ago · Author has 71 answers and 41.7K answer views
Kurt’s answer is a well structured and text book answer to the question. In theory it is the ideal market structure. In reality, without differentiation you have no acceptance of risk and no innovation. In the end there is not enough profit to create invention and so you have stagnation. Indeed invention would break one of the underlying assumptions of Perfect Competition.