Perfect competition in Indian Economjc Sector

Perfect competition
What is perfect competition? How does it work? And why does it matter?
Perfect competition is that theoretical structure of the market in economics where a high number of buyers and sellers engage in the market and no single agent has the power to change the market price. It's often considered the ideal or standard model for understanding how markets efficiently work. Perfect competition doesn't exist in the real world very often, but it still gives an important framework for thinking about market dynamics, efficiency, and the allocation of resources.
In this article, we will discuss the essential characteristics of perfect competition, conditions, theoretical concept versus its applicability in real life, advantages and disadvantages, comparison with monopoly, and practical illustrations on how it can be manifested or approximated in practice.
What is Perfect Competition?
Perfect competition is an economic term in describing a market structure. Perfect competition entails the existence of several buyers and sellers, homogenous products, perfect information, and easiness in entry and exit. In a perfectly competitive economy, no single firm and no single consumer can be able to influence the price, and the market allocates resources efficiently.
This ideal market is based on a number of assumptions that simplify economic analysis, so economists can study the forces of supply and demand without complicating factors found in more complex market structures. Perfect competition results in the most efficient outcome both in terms of production and consumption in maximizing total welfare of an economy.
How Does Perfect Competition Work?
In a perfectly competitive market, forces of demand and supply determine the equilibrium price and quantity. Let's take a look at the mechanics:
Supply and Demand Dynamics
Demand: Consumers would want a good at different prices; as the price continues to decline, their purchasing power increases.
Supply: The suppliers wo