Perfect competition is a competitive system in which a large number of firms produce a homogenous product for a large number of buyers.
All the firms share the same product/market knowledge and enjoy free entry/exit to and from the industry. They are price-takers and sell as much of theproduct as possible at the market price.
Output is set where marginal cost equals marginal revenue. In the long run, average revenue equals marginal cost and firms enjoy only normal profits.
G Stigler, 'Perfect Competition, Historically Contemplated', Journal of Political Economy, vol. LXV (1957), 1-17