Answer :Perfect competition is a market structure in which there
are following criteria such as :
- All firms are selling identical product . As they are selling
similar product in the market.
- All firms are price takers and market share has no influence on
price.
- Buyers have complete or perfect knowledge.
- Free entry and exist of the firms from the market.
- Perfect knowledge of the market.
- Identical price has been charged.
Answer : Obstructions of perfect competition are :
- There is less scope for economies of scale. this is because
there are may firms that are selling small quantity of goods sold
resulted in relatively small amount.
- Identical product lead to boring for the customer.
- Low level of super normal profit and resulted in creation of
problem.
- less incentives to develop new and higher technology in the
market structure .
- lack of competition over the product in the market.
is b