Perfect competition is a market where there are large numbers of buyers and sellers and sellers sell homogeneous commodity at uniform price. 

Under Perfect Competition a firm is only price taker. 

Main features of perfect competition are as under -

(i) Large number of buyers and sellers - Under perfect competition buyers and sellers are in such a large number so that neither a single buyer nor a single seller can influence the market. It is because each seller sells a very small portion of the market supply, similarly the demand of each buyer is also very small in the market.

(ii) Homogeneous product - The product sold in the market is homogeneous or identical in all respect i.e. shape, size, colour, composition, etc.

(iii) Free entry and exit of firms - Under perfect competition there are no barrier to entry and exit of firms in industry. But entry and exit may take time so it happens only in long runs.

(iv) Perfect knowledge of market- In this market all the sellers as well as buyers have the complete information about the market situation. It means they are well aware about the product and its price.

(v) Perfect mobility – The factors of production i.e. land, labour, capital and entrepreneur are perfectly mobile. There is no geographical and occupational restriction on their movement. It means factors of production are free to move from one place to another place and one job to another job in which they get better price.