Final answer:
Perfect price discrimination rarely occurs as firms usually lack the detailed information necessary about each buyer's valuation of their product, and it's more related to monopolistic markets than to competitive ones.
Step-by-step explanation:
Perfect (first degree) price discrimination is an economic concept where a seller charges each buyer the maximum price they are willing to pay, eliminating consumer surplus and maximizing the seller's profits. This scenario is more of a theoretical construct than a common practice because it requires extensive information about each buyer's willingness to pay, which firms typically do not possess.
Therefore, perfect price discrimination rarely occurs because firms lack sufficient information to differentiate among specific buyers at such a granular level. Moreover, it is not associated with competitive markets but rather with monopolistic ones, where the seller has significant market power and can set prices for each buyer individually.