Question

Identify a perfectly competitive firm that you can purchase a good/service from. Make sure to relate the answer to market characteristics.

Answer 1

A very closely related example of perfect competition can be seen in case of fish market in India. It can be seen that all the sellers are selling similar type of fish having same price for the same type of fish. It does not make much difference whether a buyer purchase fish from one seller or some nearby seller. Another example can also be seen in case of software where sellers are allowed to enter or exit the market Even price is determined by market forces and is not dependent on seller's will. All these characterise the features of perfect competition

Thus perfect competition is a type of market structure where there are large number of buyers and sellers selling identical products. Similar price prevails in the market thus all sellers earn normal profit There is free entry and exit from the market. Price is determined by market forces. But real perfect competition doesn't exist. Only a closely related perfect competition exist as seen in fish market or in the case of vegetables also.