Define a perfectly competitive market. Discuss three differences … - Vidyadip

Question

Define a perfectly competitive market. Discuss three differences between a perfectly competitive market and a monopoly.

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Answer

Perfect competition is a form of the market in which there is a large number of buyers and sellers and where homogeneous product is sold at a uniform price.
Difference between perfect competition and monopoly

Basis	Perfect competition	Monopoly
1. No. of sellers	There are very large number of sellers in the market.	There is a single firm in the market.
2. Price	Firm is price taker.	Firm is price maker
3. Nature of product	Each firm produces and sells homogeneous product.	The firm produces and sells such product which does not have close substitutes in the market.

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