Perfect market

A perfect market is a market where the competition is complete, there are many sellers and many buyers of identical products that is perfectly comparable.

A perfect market is characterized by the condition that no company in this market can set its own price. The market price that is prevailing on a market that is a perfect market is the price that each company must accept. Firms in a perfect market faces a horizontal demand curve. If a company has a higher price than the market price, this company will not sell any products at all.

A perfect market is the ultimate market to create prosperity and efficiency in a country. Unfortunately, there are few markets that are perfect markets.