Perfect competition is characterized by factors like multiple sellers (or competitors), identical products on the market, sellers accepting rather than influencing market prices and free entry and exit into the given industry. In the actual business world, perfect competition is extremely rare, but it is an important economic concept.
Competition is a free-market principle that factors in to many different parts of the economy, and perfect competition is a concept that is useful for economic analysis rather than an actual goal for businesses. Economists may also refer to perfect competition as pure competition, implying that no mitigating factors are in play, such as one business that has a dramatically better product or an industry that has developed to create severe impediments to free entry into the market. This allows economists to analyze members of an industry as equals. Though rare in real life, Fullerton College states that agricultural industries are good real-life examples of perfect competition.