Answer:
There are three conditions for an formation of a perfectly competitive market which are:
- There are many buyers and sellers participating in the market in the way that one buyer or seller or a group of buyers or sellers can not decide the price/ production level of a product or service in the market.
- All firms in the market produce and sell homogeneous product/service, that is, product/service sold in the market are non-differentiated.
- Firms should be able to get into or leaving the market easily if they want so. That is, there should be no barrier to enter or to exit the market.
Explanation:
