Perfect competition is an economic concept that describes an idealized market structure where all producers and consumers have full and symmetric information and no transaction costs. In a perfectly competitive market, there are a large number of producers and consumers competing with one another, and all firms sell identical products. Here are some key characteristics of a perfectly competitive market:

• Homogeneous products: A large number of sellers produce and sell an identical product or service.
• No barriers to entry or exit: There are no startup costs or legal restrictions, and firms can easily enter or exit the market.
• Price takers: All firms are price takers, meaning they must accept the equilibrium price at which they sell goods.
• Perfect information: Consumers have perfect knowledge about the market and are well aware of any changes in the market. Consumers indulge in rational decision making.
• No market power: Individual economic actors have no market power.

In a perfectly competitive market, any profit-maximizing producer faces a market price equal to its marginal cost, and a factors price equals the factors marginal revenue product. This implies that a firms price equals its marginal cost, and it allows for derivation of the supply curve on which the neoclassical approach is based. Perfect competition is a benchmark or ideal type to which real-life market structures can be compared. However, real markets are never perfect, and they exist outside of the plane of the perfect competition model.