The main characteristics or features of perfect competition can be described as follows:
1. Unlimited Number Of Firms And Buyers
Perfectly competitive market structure consists of large number of firms (producers or traders) and unlimited number of buyers. So, no one can individually influence the price in the market because of competition.
2. Identical Products
Another notable feature of this market structure is that all the producers and traders produce and sell identical or homogeneous products (in size, quality, taste, weight etc.)
3. Identical Price
Demand and supply determines the price of the product in perfect competition. Traders cannot increase or decrease the price of their product as per their wish. So, the price will be identical or same in the entire market.
4. Easy To Enter And Exit
There is a freedom of entry and exit in this market. There are no restrictions and barriers on entry and exit.
5. No Government Regulation
In perfect competition, there is no government regulation, control and intervention on production, supply, and pricing.
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6. Mobility Of Factors
Perfect competition promotes mobility of factors. Factors of production should be mobile (free to move) without any barriers and constraints.
7. No Transportation Costs
Perfect competition lacks transportation cost. Transportation cost is not added in the selling price of the commodity.
