Perfect Competition: Things start out simple enough with an overview of the list of assumptions of the perfectly competitive model.  The authors give five conditions that must be met for a market to be perfectly competitive and students will likely be quick to point out that it is unlikely that any real-world market completely satisfies these conditions.  There are a couple of important points to make in response to this concern.  First, as the authors note, while it is difficult to identify a real-world market that meets the textbook definition of perfect competition, there are many real-world markets in which price-taking behavior is observed and in those cases the model is quite valid.   It is also important to explain to students that not all models are designed to mimic reality.  In this case the model of a perfectly competitive market and the results of the analysis of the model act as a benchmark against which other market structures can be compared.