Write down two features of perfect competition.

1.	Write down two features of perfect competition.
Answer» Following are the two features of perfect competiton: A Large Number of Firms The first condition of perfect competition is that there are a large number of companies in the industry. The presence of a large number of firms making and selling the product ensures that no single producer or buyer can have any effect on the price of the product. Homogenous Product The products produced by all firms in the industry are fully homogeneous and identical. It means that the products of various firms are indistinguishable from each other; they are perfect substitutes for one another. The control over price is completely eliminated only when all firms are producing homogeneous products.

Answer»

Following are the two features of perfect competiton:

A Large Number of Firms The first condition of perfect competition is that there are a large number of companies in the industry. The presence of a large number of firms making and selling the product ensures that no single producer or buyer can have any effect on the price of the product.
Homogenous Product The products produced by all firms in the industry are fully homogeneous and identical. It means that the products of various firms are indistinguishable from each other; they are perfect substitutes for one another. The control over price is completely eliminated only when all firms are producing homogeneous products.

Discussion