A perfect competition market is defined by the following characteristics:
- Identical products
- Open entry and exit
- Price taker
A perfect competition market is constituted by an elevated number of both sellers and buyers. There are no entry or exit barriers, and this is why the number of competitors is so high. Moreover, the product they all commercialize is exactly the same. These firms are price takers, because they cannot influence the market price of its product, and is it the demand function and the desires and income of consumers what defines the market equilibrium (market price and the amounts produced and supplied).