Perfect competition is a market situation where there are large number of buyers and seller. Buying and selling homogenous products at a single uniform price.
It is market structure in which a large number of firms produced and sell products that are differentiated but close substitutes
There is high degree of competition
There is competition among the firms producing very close substitutes.
There is no selling cost because the product is homogeneous.
Firms incur selling cost to promote sales.
The firm is price taker. Thus, the firm has horizontal demand curve.
The firm is a price maker. Thus the firm has a downward sloping demand curve.