perfect competition

Also known as atomistic competition, atomistic market

market structure in which firms are price takers for a homogenous product

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In economics, specifically general equilibrium theory, a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. In theoretical models where conditions of perfect competition hold, it has been demonstrated that a market will reach an equilibrium in which the quantity supplied for every product or service, including labor, equals the quantity demanded at the current price. This equilibrium would be a Pareto optimum.

Perfect competition provides both allocative efficiency and productive efficiency: