Each of the characteristics provides important information about the expected behavior of perfectly competitive firms.

Many Firms:: Firms only care about overall market conditions, not the behavior of single competitors. Since each firm is tiny with respect to the market, it can always sell all the output it produces at the market price.
No Product Differentiation:: Firms must charge identical prices since they produce identical products.
Free Entry/Exit:: Any time firms in the industry show a profit, new firms will enter; enough to shift industry supply out (increase). Any time firms are loosing money, some firms will exit; enough to decrease industry supply.