Describe why excess profits can't be made in a competitively perfect market.

An example introduction to an essay question would be: Under perfect competiton we make the follwing assumptions: Homogoenous products. There are many buyers and sellers and each one is so small that no individual firm or consumer can affect the market. Firms are price takers. There is perfect knowledge. There is perfect factor mobility. Firms are looking to profit maximise. This essay will look at a perfectly competitve market, such as vegetable shops in a market, to show that perfect competiton cannot make positive profits in both the short and long run periods. 

HE

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