Perfect Competition: Conditions 
There is said to be’ perfect competition ery purchaser and seller is so sn~a\l relative to the entire market that he cannot influence the market price hy increasing or decreasing his purchases or his output. Perfect competition is a wider term than pure COIllpetition. Besides, the two conditions of pure competition mentioned above, \’iz., the homogeneity of the product and the existence of a large number of dealers, several other conditions must also he fulfilled to make it a perfect competition. Thus, the conditions of perfect competition are (i) Large number of buyers and seller: . (ii) Homugeneuus product. (These conditions of pure competition have already been discussed above.)
(iii) Free Entry Of E’\il. There. hould be no restrictions, legal or otherwise. on the firms’ entry into, or exit from, the industry. In thi\ situation all the firms will be making just normal profit. If the profit is more than normal, new firms will enter and extra profit will be competed away: and If. on the other hand. profit is less than normal, some fin”, will quit. raising the profits for the remaining firms. But if there arc restrictions on the entry of new firms, the existing firms may continue to enjoy supernormal profit. Only when there arc no restrictions on entry or exit, the firms will earn normal profit. Knowledge. Another assumption of perfect competition is that the purchasers and sellers should be fully aware of the prices that arc being offered and accepted. In case there is ignorance among the dealers, the same price cannot rule in tbc market for the same commodity. When the producers and the customers have full knowledge of the prevailling price. nobody will offer more and none will accept less. and the same price will rule throughout the market. The producers can sell at that price as much ;” they like and the buyers also can buy as much a~ Ihey like Chamberlin thus brings but the distinction between pure competition and perfect competition: “Purity requires only the absence of monopoly. which is rcaliscd when there arc many buyers and sellers of the  (perfectly standardized) product. Perfection is concerned with other mailers as well: mobility of resources, perfect knowledge. etc.Perfection is a different thing from its purity, meaning by the latter its freedom from monopoly clcmcuts

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