Perfect competition is defined as a market situation where there are a large number of sellers of a homogeneous product. An individual firm supplies a very small portion of the total output and is not powerful enough to exert an influence on the market price. A single buyer, however large, is not in a position to influence the market price. [...]
A market is said to be perfectly competitive when all firms act as price-takers — when they can sell as such as they like at the going price but nothing at a higher price. This is so because every firm is so small a part of the market that it can exert no influence on market price by selling a [...]
The following points highlight the four important features of perfect competition: (a) According to the standard definition in perfect competition, there are a large number of sellers and buyers of the product, but they are individually too small in relation to the market to be able to affect the price of the product by their own actions. This means that [...]