State and discuss four characteristics of perfect competition

Explanation

(1) Large number of buyers and sellers, The number of buyers and sellers is so large that an individual seller or buyer has insignificant share of total output sold or purchased.
(2) Homogeneous products: The buyers treat the products of all the firms in the industry as identical/homogeneous.
(3) Perfect knowledge: All producers and consumers are fully informed about the market.
(4) Freedom of entry and exit: There are no barriers in the way of new firms joining the industry and existing firms leaving the industry.