Question

Explain Perfect knowledge about the markets feature of perfect competition.

Answer 1

Perfect competition- perfect knowledge about the market:-

Perfect knowledge means that both the buyers and sellers are fully informed about the market price. Its implication is that no firm is in a position to charge a different price and no buyer will pay a higher price. As a result, a uniform price prevails in the market. Both buyers and sellers have perfect knowledge about the input markets. This means that each firm has an equal access to the technology and the inputs used in the production. Hence all the firms have uniform cost structure. Since there is uniform price and uniform costs in case of all firms earn uniform profits.