Conditions of Perfect Competition?

1. Many Buyers and Sellers: There are numerous buyers and sellers in the market, and none of them has the power to control the market price or the quantity of output. 2. Homogeneous Product: The product sold by all the firms in the industry is identical and there is no scope for any differentiation. 3. Perfect Knowledge: All the buyers and sellers in the market have perfect knowledge about the prices, cost structure and technology of production. 4. Free Entry and Exit: There are no restrictions on the entry and exit of firms from the industry, thereby allowing new firms to enter the market as and when required. 5. No Government Intervention: The government does not intervene in the market to set prices or restrict output. All the decisions are taken by the players in the market based on market forces.