Perfect competition assumes that consumers, firm and factor suppliers have perfect knowledge of cost and benefits. In the real world, there is often a great deal of ignorance and uncertainty. Thus people are unable to equate marginal benefit with marginal cost.
Consumers purchase many goods only once or few times in a lifetime. Cars, washing machines, television and other consumer durable fall into this category. Consumers mat not be aware of the quality of such goods until they have purchased them, by which time it is too late. Advertising mat contribute to people's ignorance by misleading them as to the benefits of a good.
Firm are often ignorant of market opportunities, price, cost, the productivity of factor ( especially white-collar workers ), the activity of rival, etc.
Many economic decisions are based on expected future conditions. Since the future can never be know for certain, many decision are taken that in the retrospect will be seen to have been wrong.
In some case, it may be possible to obtain the information through the market. There may be an agency that will sell you the information or a newspaper or magazine that contains the information. In this case, you will have to decide whether the cost to you of buying the problem here is that you may not have sufficient information to judge how reliable the information is that you are buying!
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