Perfect competition is the simplest market structure and is rare due to the number of factors involved. Multiple actors, identical products, information and the free market. Most often, at least one of these factors is absent or altered in market structures due to either government intervention or specialization. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an Original Essay Large numbers of buyers and sellers: In perfect competition, there are enough buyers and sellers that no single individual can influence the industry's price and output. An individual customer cannot influence the price of the product because it is too small compared to the entire market. Similarity: 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 company offers homogeneous products, such that no individual prefers one particular seller over another. . An increase in price 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 exit that industry and start its business operations if any of the industry players want to do so. Thus, there are no restrictions on the mobility of sellers. Perfect knowledge of prices and technology: This implies that buyers and sellers have complete knowledge of market conditions such as prices of products and the latest technologies used to produce them. No transport costs: there are no transport costs; this is an essential condition of perfect competition since the homogeneous product must have the same price throughout the market and if we add the cost of transport, then the prices can 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 placed on either party. In addition, prices are subject to change freely according to conditions of supply and demand. No large producer or the government can step in and control the demand, supply or price of goods and services. Imperfect Competition: An industry in which individual companies have some control over pricing and competition. Imperfectly competitive industries result in inefficient allocation of resources. Monopoly: An industry consisting of a single company that produces a product for which significant barriers exist to prevent new companies from entering the industry. Features: a large number of companies in the industry. May have some elements of control over pricing in that they are able to differentiate their products in some way from those of their competitors - so the products are close, but not perfect, substitutes. Entry and exit from the industry is relatively easy - few barriers to entry and exit. Imperfect knowledge of consumers and producers. Most suppliers have some control over market supply. Some buyers have monopsony power over suppliers because they purchase a large percentage of the.