What is the type of market called where a large number of buyers and sellers exist for the same quality product?

✅Explanation:
Perfect competition is a theoretical market structure characterized by a large number of buyers and sellers, homogeneous products (meaning the products are identical or very similar), free entry and exit of firms, perfect information, and no single buyer or seller has control over the market price. In this type of market, firms are price takers, meaning they must accept the market price determined by supply and demand.
Key Points

• Perfect Competition:
-In a perfect competition market structure, there are a large number of buyers and sellers. All the sellers of the market are small sellers in competition with each other.
-There is no one big seller with any significant influence on the market. So all the firms in such a market are price takers. 
-Participants are high both buyers and sellers.
-Products have many substitutes and no marketing or selling cost is incurred.
-Knowledge of participants for entering into the market is perfect.
-The seller is a Price taker, not a price maker.
-The buyer is willing to buy all at a certain price but none at price higher. So he is a price maker.
Additional Information

• Monopoly:
-Buyers are many but the seller is one.
-Product has no substitute or no close substitute
-Other competitors can't enter the market due to laws or patents.
-Price discrimination is seen between the poor and rich. The seller is a Price maker.
-Relative Price inelastic increase means demand decreases by less than X% for an X% increase in price.
-A natural monopoly is when there is an extremely high fixed cost of distribution e.g. gas, water, electricity.

• Monopolistic competition:
-Monopolistic competition is a form of market in which there are large numbers of sellers of a particular product but each seller sells somewhat differentiated but close products. Hence, Option 3 is correct.
-Many buyers and sellers but each selling its differentiated version of good.
-Marketing selling cost is high.
-Goods are of different brands where brand loyalty is seen to a limit but many substitutes are available.
-Unrestricted entry.
-Seller is Price maker to a level.
-Price increases by x% but demand decreases by less than x% – relatively inelastic. But more elastic than monopoly.

• Oligopoly:
-Buyers many but sellers few with intense competition.
-Product has close substitutes and intense competition amongst sellers. If one seller introduces change others have to follow. High cost of marketing and selling.
-Entry of new sellers is tough due to economies of scale.
-The seller is a price maker.

• Monopsony:
-The monopoly of the buyer but multiple sellers present.
-Entry closed for other buyers
-Seen where the government wants to make a defense-related purchase and multiple sellers are bidding for it.
-The buyer is a price maker.