Key Differences between Perfect Competition and Imperfect Competition

The following are the major differences between perfect competition and imperfect competition

1. The competitive market, in which there are the large number of buyers and sellers, and the sellers supply identical products to the buyers, it is known as perfect competition. Imperfect competition, occurs when one or more conditions of the perfect competition
are not met.
2. Perfect competition is a hypothetical situation, which does not apply in the real world. Conversely Imperfect Competition, is situation that is found in the present day world.
3. In perfect competition there are many players in the market, but in imperfect competition there can be few to many players, depending upon the type of market structure.
4. In perfect competition the sellers produce or supply identical products while in imperfect competition the products offered by the sellers can either be homogeneous or differentiated.
5. In perfect competition there are no barriers in the entry and exit of the firms which is just opposite in case of imperfect competition.
6. In perfect competition, it is assumed that the firms do not influence the price of a product, hence they are price takers but in imperfect competition the firms are price makers.

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