Perfect competition is a market structure where there are many small firms that sell identical products, and there are no barriers to entry or exit. In a perfectly competitive market, no single firm has the power to influence the price of the product. All firms in the market are price takers, meaning they must accept the market price for their product. This results in a situation where prices are determined by the market forces of supply and demand, and there is no room for any individual firm to make a profit above the normal rate of return. Perfect competition is considered to be a theoretical market structure, as it is difficult to find real-world examples that meet all the criteria.