Group 3A Roll No. Group 3B Roll No.

Urusa 2017 Akshat 2646

Aashi 2039 Divyansh 2160
Yuvraj 2139 Himanshu 2871
Paras 2815 Jeel Patel 2376
Ankita 2068 Gaurav 2309
Somya 2404 Vashu 2543
Shivangi 2826
 Perfect Competition

• Perfect Competition is a type of market

structure where many firms sell similar
products and profits are virtually non-
existent due to fierce competition.
 Characteristics of Perfect Competition

• Many Competing Firms.

• Similar Products Sold.

• Equal Market Share.

• Buyers have full Information.

• Ease of Entry & Exit.

 Advantages
• Very Low Barriers to Entry & Exit
• Chance Of Customer Exploitation Is Low
• Consumer Information Is High
• Active Business Environment
• Availability of High-Quality Products with Low Price
• Optimum Utilization Of Resources
 Disadvantages

• Absence of innovation.
• Profit margin are fixed by demand and suppliers.
• Heavy competition results to more producers to exit.
• Identical and non-differentiated products and services.
 Social media network.
• There was a proliferation of sites offering similar services during the early days of
social media networks.

• Some examples of such sites were Sixdegrees.com, Blackplanet.com, and

Asianave.com. None of them had a dominant market share and the sites were mostly
free.

• The startup costs for companies in this space were minimal, meaning that startups
and companies can freely enter and exit these markets.

• Remember that Mark Zuckerberg effectively founded Facebook from his college
dorm.

• Since companies like Facebook and twitter got popular and received fundings. the
industry remains no longer a perfect competition.
Online Shopping.

• History
 1982 Bosten
 1992 First book market place
 1995 Amazon
 1996 eBay
 1999 Alibaba

• Current scenario
• More buyer more seller.
• Customer can shift
 Farmers.
• The closest real-life example to perfect competition is farmers markets.

• They sell nearly identical products for very similar prices.

• The prices and product information is clear and fairly uniform so entry and
exit of some vendors does not change the overall marketplace.

• There may be cheaper versions of the same product in supermarkets, such as

cereal made by the different brands.

• But these substitutes will be significantly different in quality or price, so they

resemble a perfectly competitive market.
 Street food vendors- Various vendors exist
selling almost homogeneous products, like
Vada pav. Let us assume a vada pav costs
around 15 rupees. A vendor cannot sell his
vada pav at higher prices (i.e.,
negligible pricing power). Customers are free
to purchase their vada pav from any vendor of
their choice. Also, barriers to entry and exit for
vendors in the market are virtually negligible;
hence competition is very high.
 Source links

• https://learnbusinessconcepts.com/perfect-competition-advantages-and-disadvantages/

• https://www.investopedia.com/terms/p/perfectcompetition.asp#toc-examples-of-perfect-co
mpetition

• https://boycewire.com/perfect-competition-definition/

• https://economictimes.indiatimes.com/definition/perfect%20competition
Thankyou