A perfectly elastic collision is defined as a collision in which no kinetic energy is lost, meaning there is no sound or friction involved. This type of collision is primarily observed at the atomic level, such as in the interactions between gas particles. While perfectly elastic collisions are idealized concepts, they do not occur in the macroscopic world due to various energy losses. The discussion highlights the distinction between perfect and elastic collisions, emphasizing that perfect elasticity is a theoretical construct. Overall, perfectly elastic collisions are largely theoretical and not found in everyday experiences.