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Buyers and sellers become price takers when the pressure of competition in the market makes them accept the equilibrium price in the market. This implies a company is losing sales when pricing above the set market price in a perfectly competitive market. There exists perfect competition when products are identical, and there is the vast availability of buyers and sellers. Also, both buyers and sellers having information to make coherent decisions about products. Moreover, the option of free entry and exit out of the market is available. There exists no unnecessary government regulation or third-party profits. Firms are expected to go profitable in the long run.

The bond market, stock market, and sugar industry are perfectly competitive since there are innumerable brokers, sellers, buyers, and investors available in the market. They are trading their stocks at the same value in huge quantities. These stocks are identical, and even entry and exit are easy for them in the market.

The foreign exchange market is also perfectly competitive. There are again a large number of buyers and sellers available for the exchange of foreign currencies. This particular trading is done at an equilibrium rate. Moreover, entry and exit are again easy out of the market.

The oil market is at least perfectly completive. Some prominent players like Venezuela and Saudi Arabia hold 25 and 22 percent of the whole world’s oil reserves, respectively. OPEC Member Countries have 79 percent oil according to OPEC Annual statistical bulletin 2019. This shows oil is in the hands of a few countries, and entry into the market is nearly impossible.

Economic profit is referred to as abnormal profit. Buyers don’t readily accept new products in the market. It requires a vast amount of time for firms to sell their products at large in the market and generate high income. This development for firms is challenging. To help firms, government accords patents to the firm to help protect the firms’ investment. This ultimately sets up an artificial monopoly and allows them to earn a vast economic profit.