A market structure where the following five standards are met:

  1. All firms sell an same product;
  2. All firms are price takers - they cannot control the market price of their product;
  3. All firms have a relatively small market share;
  4. Buyers have complete information about the product being sold and the prices charged by each firm; and
  5. The industry is characterized by freedom of entry and exit.
  6. Perfect competition is sometimes referred to as "pure competition".