Perfect Competition - individual firms. When market...

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Perfect Competition: Competitive market is supposed to be perfect in every respect. For this three conditions must be satisfied: i) Perfect knowledge on the part of the buyers and sellers about market conditions, ii) Perfect mobility of the factors of production, and iii) Proximity to the market. This further consolidates competitive force and rules out the influencing capacity of
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Unformatted text preview: individual firms. When market conditions are perfectly understood there is no chance of a higher price being charged or paid. When factors of production are freely mobile, entry or exit of firms is facilitated. Proximity to the market further ensures that there is no extra transport cost, which may otherwise cause a small variation in the price....
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