Which of the following best defines perfect competition?

Perfect competition is characterized by a market structure where numerous firms offer a standardized or homogeneous product. In such a market, no individual firm has the power to influence the market price since the products are identical, and consumers will switch to other sellers if one firm tries to charge a higher price. This creates a scenario where all firms are price takers, meaning they must accept the market price determined by supply and demand.

Additionally, in perfect competition, there are no significant barriers to entry or exit in the market, allowing new firms to enter when they see an opportunity for profit, further ensuring competitive pricing and product availability.

The other descriptions provided do not align with the principles of perfect competition. For instance, a market with differentiated products indicates a monopolistic competition structure, while a market dominated by one seller aligns more closely with a monopoly. High barriers to entry typically characterize oligopolistic or monopolistic market structures, rather than a perfectly competitive one, where free entry and exit are essential features.