Perfect Competition - Part 2

[savio13]

A market becomes perfectly competitive when the following conditions exist:

(iii) Free Entry and Exit: There is no restriction whatsoever for any producer to produce a commodity and sell it in the market. Restrictions in any form such as Government’s license or permit, non-availability of technology, inadequate finance, etc. are not be there. Similarly a producer is free to wind up his business without any problems, legal or political. Such freedom avoids excess supply or shortages.

(iv) Complete Market Information: A perfect knowledge or complete information about the market-price, demand, supply etc. is expected to be possessed by all the buyers and sellers.
Such knowledge will prevent the buyers from paying a higher price and sellers charging a different price than what is prevailing in the market.