Perfect competition is the simplest market structure and is particularly rare due to the number of factors involved. Multiple participants, identical products, information and free market. In most cases at least one of the factors is absent, or modified, in market structures due to government intervention or specialization. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essayA large number of buyers and sellers: In perfect competition, the buyers and sellers are large enough that no individual can influence the price and output of the industry. A single customer cannot influence the price of the product, since it is too small compared to the entire market. Likewise, a single seller cannot influence production levels, which are too small compared to the range of sellers operating in the market. Homogeneous product: Each competing firm offers homogeneous products, such that no individual prefers one particular seller over another. A price increase would allow the customer to go to another supplier. Free Entry and Exit: Under perfect competition, firms are free to enter or exit the industry. This implies that if a company suffers a huge loss due to intense competition in the industry, then it is free to leave that industry and start its own business operations if anyone in the industry wants to. Therefore, there are no restrictions on the mobility of sellers. Perfect knowledge of prices and technology: This implies that both buyers and sellers have complete knowledge of market conditions such as prices of products and the latest technology used to produce them. No Shipping Cost: There is no shipping cost; this is an essential condition of perfect competition since the homogeneous product should have the same price throughout the market and if the transport cost is added to this, prices may differ. No artificial restrictions: In perfect competition, both buyers and sellers are free to buy and sell goods and services. This means that any customer can buy from any seller, and any seller can sell to a buyer. No restrictions are imposed on either party. Furthermore, prices can vary freely based on supply and demand conditions. No major manufacturer and government can step in and control the demand, supply, or price of goods and services. Imperfect Competition: An industry in which individual firms have some control over price and competition. Imperfectly competitive industries result in inefficient allocation of resources. Monopoly: An industry consisting of a single firm producing a product for which significant barriers exist to prevent new firms from entering the industry. Features: a large number of companies in the sector. They may have some elements of control over price due to the fact that they are able to differentiate their products in some way from their rivals: the products are therefore close, but not perfect, substitutes. Entry and exit from the industry is relatively easy: few barriers to entry and exit. Consumer and producer knowledge is imperfect. Most suppliers have some degree of control over the market's supply. Some buyers have monopsony power over suppliers because they purchase a significant percentage of total demand. Most markets have heterogeneous products due to product differentiation and constant innovation. Consumers almost always have imperfect information and the effects of.