Perfect competition and pure competition are typically distinguished, but only in degree. The first four requirements pertain to pure competition, but the next three are also necessary for perfect competition to occur. Pure competition, according to Chamberlin, is “competition free of monopolistic elements,” but perfect competition entails “perfection in many more ways than in the absence of monopoly.”
In today’s world, complete competition isn’t as important as it once was, because just a few markets, such as those for staple foods and raw resources, are perfectly competitive.
Though perfect competition does not exist in the actual world, it is studied for the simple reason that it aids in our knowledge of how an economy works, where competitive behaviour leads to the optimum allocation of resources and the most efficient organization of production. In any economy, a hypothetical model of a fully competitive sector serves as the foundation for evaluating the real functioning of economic institutions and organizations.