Explain about the perfect competition according to economics theory.

The procedure of testing and refining theories is the key to the development of modern economics like a science. One illustration is the assumption of perfect competition. Actually, no competition is ideal. Real world markets seldom attain this ideal status. The query is then not whether any specific market is perfectly competitive, mostly no one is. The suitable question is to what degree models of ideal competition can generate insights regarding real-world markets. We consider this assumption is approximately accurate in specific situations. Just as frictionless models in physics, as like in free falling body movement (no air resistance), perfect gas (molecules do not collide), and perfect fluids, frictionless models of ideal competition generate helpful insights into the economic world.

This is frequently heard that someone is claiming they have toppled an existing conclusion or theory, or that this has been overthrown, while some condition or assumption behind this is criticized. It is usually unnecessary claim, since any formal rigorous theory can be criticized at any time since no assumption can coincide fully along with reality or cover everything.