What are the distinctive characteristics of a perfectly competitive market?

Many sellers in the market - each of whom produce a low percentage of market output and cannot influence the prevailing market price – each firm in this market is a price taker - i.e. it has to take the market price Many individual buyers - none has any control over the market price Perfect freedom of entry and exit from the industry. Firms face no sunk costs and entry and exit from the market is feasible in the long run. This assumption means that all firms in a perfectly competitive market make normal profits in the long run Homogeneous products are supplied to the markets that are perfect substitutes. This leads to each firms being “price takers" with a perfectly elastic demand curve for their product Perfect knowledge – consumers have all readily available information about prices and products from competing suppliers and can access this at zero cost – in other words, there are few transactions costs involved in searching for the required information about prices. Likewise sellers have perfect knowledge about their competitors Sellers do not behave strategically, due to the high number present in the market