A competitive market has many buyers and sellers trading identical products so that each buyer and seller is a price taker. In a perfectly competitive market, it is assumed that there are many suppliers who have no influence over market supply conditions.
=> Perfect competition is the only market structure for which a supply function can be derived.
=> Perfect competition assumes that there are many buyers and sellers, each of whom are price-takers. No individual or firm can take an action to change the market price.
=> Other assumptions include perfect information, well defined property rights, and undifferentiated products.
=> The short-run market supply curve differs from the long-run market.
