![Pure competition and perfect competition Pure competition and perfect competition](https://digitalteachers.co.ug/wp-content/uploads/2022/09/Bbosa-Science.png)
Pure competition and perfect competition
Pure competition is a marketing situation characterized by
- Large number of buyers and sellers
- 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 products).
- Market share has no influence on prices.
- Firms can enter or exit the market without cost.
- No transport costs
- No government intervention.
Perfect competition is a market structure characterized by
- Large number of buyers and sellers
- 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 products).
- Market share has no influence on prices.
- Firms can enter or exit the market without cost.
- No transport costs
- No government intervention.
- Buyers have complete or perfect information (in the past, present, and future) about the product being sold and the prices charged by each firm.
- Capital resources and labour are perfectly mobile.
NB. The last two characteristics distinguish perfect competition from pure competition
CATEGORIES Economics
TAGS Dr. Bbosa Science