What are the characteristics for perfect competition firms and when do they make profit?
The chracteristics of perfect competition are: many firms, freedom of entry and exit, all firms produce identical or homogenous products, all firms are price takers(have no influence over the price) and have a perfectly e;astic demand curve, there isd perfect information and knowlege between the firms.
When firms in PC make profits, they are called abnormal profits and they can happen just in the short run because in the long run, other firms won't follow and raise their prices, consequently leading to a decrease in the quantity demanded of the firm with higher prices making abnormal profits.
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