Outline five features that characterizes a perfectly competitive product market and explain the significance of each feature.
-There are many buyers and many sellers. This ensures that no single buyer or seller can influence the market-Free entry and exit of firms to the market. Ensures that normal profits are earned byall firms in the long-run in the industry-There is perfect mobility of factors of production. This ensures that resources are optimally allocated.-There is no transport costs. This ensures that prices do not vary due to regional differences.-The products are homogeneous. This means that units produced areidentical so that the buyers have no preference between different units.-There is perfect knowledge about the prices,quality and other market conditions on the part of the buyers and sellers. This ensures rational decision making by consumers and producers.