Perfect competition is an economic model that describes a hypothetical market form in which no producer or consumer has the market power to influence prices. The following are the characteristics of a perfectly competitive model: �� Many buyers and sellers �� Atomicity: An atomistic market is one in which there are a large number of small producers and consumers on a given market, each so small that its actions have no significant impact on others. �� Homogeneity: Each firm produces a good that is identical to those produced by the other firms in the industry. Goods and services are perfect substitutes; that is, there is no product differentiation. �� Perfect and complete information: All firms and consumers know the prices set by all firms. �� Equal access: All firms have access to production technologies, and resources (including information) are perfectly mobile. �� Easy entry and exit: Any firm may enter or exit the market as it wishes so there are no barriers to entry. �� Firms are price takers: Firms have no control over the price they charge consumer......

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