Perfect competition is a market structure where many firms offer a homogeneous product. Because there is freedom of entry and exit and perfect information, firms will make normal profits and prices will be kept low by competitive pressures. 完全竞争是一种市场结构，许多公司提供同质的产品。由于存在进入和退出的自由以及完美的信息，企业将获得正常的利润，价格将在竞争压力下保持低位。

Features of perfect competition 完全竞争的特点

1. Many firms.
2. Freedom of entry and exit; this will require low sunk costs.
3. All firms produce an identical or homogeneous product.
4. All firms are price takers, therefore the firm’s demand curve is perfectly elastic.
5. There is perfect information and knowledge.

Diagram for perfect competition

• The industry price is determined by the interaction of Supply and Demand, leading to a price of Pe. 行业价格由供应和需求的相互作用决定，导致了Pe的价格。
• The individual firm will maximise output where MR = MC at Q1 单个企业将最大限度地提高产量，其中MR=MC在Q1的产量。
• In the long run firms will make normal profits. 从长远来看，企业将获得正常利润。

What happens if supernormal profits are made? 如果获得超常利润会怎样？

If supernormal profits are made new firms will be attracted into the industry causing prices to fall. If firms are making a loss then firms will leave the industry causing price to rise 如果获得了超常利润，新的企业将被吸引到这个行业中来，导致价格下降。如果企业出现亏损，企业就会离开这个行业，导致价格上涨。

The features of perfect competition are very rare in the real world. However perfect competition is as important economic model to compare other models. It is often argued that competitive markets have many benefits which stem from this theoretical model. 完全竞争的特征在现实世界中是非常罕见的。然而，完全竞争是比较其他模式的重要经济模式。人们通常认为，竞争性市场有许多好处，这些好处来自于这个理论模型。

Changes in long run equilibrium 长期均衡的变化

1. The effect of an increase in demand for the industry. 行业需求增加的影响

If there is an increase in demand there will be an increase in price Therefore the demand curve and hence AR will shift upwards. This will cause firms to make supernormal profits. 如果需求增加，价格也会增加，因此，需求曲线和AR将向上移动。这将导致企业获得超常的利润。

This will attract new firms into the market causing price to fall back to the equilibrium of Pe 这将吸引新的企业进入市场，使价格回落到均衡点Pe。

2. An increase in firms costs 企业成本的增加

• The AC curve will increase therefore AR< AC AC曲线将增加，因此AR<AC
• Firms will now start making a loss and therefore firms will go out of business. This will cause supply to fall causing prices to increase. 企业现在将开始亏损，因此企业将倒闭。这将导致供应下降，使价格上升。

Efficiency of perfect competition 完全竞争的效率

• Firms will be allocatively efficient P=MC 企业将具有分配效率 P=MC
• Firms will be productively efficient. Lowest point on AC curve. 企业将具有生产效率。AC曲线上的最低点。
• Firms have to remain efficient otherwise they will go out of business. (X-efficiency) 企业必须保持高效率，否则就会倒闭。(X-效率)
• Firms are unlikely to be dynamically efficient because they have no profits to invest in research and development. 企业不可能是动态有效的，因为它们没有利润投资于研究和开发。
• If there are high fixed costs, firms will not benefit from efficiencies of scale. 如果固定成本很高，企业将无法从规模效率中获益。

Examples of perfect competition 完全竞争的例子

In the real world, it is hard to find examples of industries which fit all the criteria of ‘perfect knowledge’ and ‘perfect information’. However, some industries are close. 在现实世界中，很难找到符合 "完全知识 "和 "完全信息 "所有标准的行业例子。然而，有些行业是接近的。

1. Foreign exchange markets 外汇市场. Here currency is all homogeneous. Also, traders will have access to many different buyers and sellers. There will be good information about relative prices. When buying currency it is easy to compare prices 这里的货币都是同质化的。而且，交易者将有机会接触许多不同的买家和卖家。会有关于相对价格的良好信息。购买货币时，很容易比较价格
2. Agricultural markets 农业市场. In some cases, there are several farmers selling identical products to the market, and many buyers. At the market, it is easy to compare prices. Therefore, agricultural markets often get close to perfect competition. 在某些情况下，有几个农民向市场出售相同的产品，还有许多买家。在市场上，很容易比较价格。因此，农业市场往往接近完全竞争。
3. Internet related industries 互联网相关产业. The internet has made many markets closer to perfect competition because the internet has made it very easy to compare prices, quickly and efficiently (perfect information). Also, the internet has made barriers to entry lower. For example, selling a popular good on the internet through a service like e-bay is close to perfect competition. It is easy to compare the prices of books and buy from the cheapest. The internet has enabled the price of many books to fall in price so that firms selling books on the internet are only making normal profits. 互联网使许多市场更接近完全竞争，因为互联网使比较价格变得非常容易，快速和有效（完美信息）。此外，互联网还使进入的障碍降低。例如，通过像e-Bay这样的服务在互联网上销售一种受欢迎的商品，就接近于完全竞争。人们很容易比较书籍的价格，并从最便宜的地方购买。互联网使许多书籍的价格下降，因此，在互联网上销售书籍的公司只赚取正常利润。