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Questions
Distinguish between the following:
Perfect competition and Pure competition
How is perfect competition different from pure competition?
Give the differences between perfect competition and pure competition.
Distinguish Between
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Solution
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Sr. No.
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Perfect Competition
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Pure Competition
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1.
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Factors of production are perfectly mobile.
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Factors of production are immobile and cannot move from one industry to another.
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2.
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Buyers and sellers have perfect knowledge about the prevailing market conditions.
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Buyers and sellers have imperfect knowledge about the prevailing market conditions.
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3.
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The characteristics of perfect competition are quite stringent; hence, the existence of this market structure is a myth.
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The characteristics of this market structure are comparatively liberal; hence, they can be found in the real world.
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4.
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Products are completely identical or homogeneous.
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Products are homogeneous.
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5.
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Large number of buyer and sellar
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Large number of sellers only is essential.
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6.
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There is free entry and exit of firms in the long run.
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This market structure assumes freedom of entry and exit.
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