A perfect market is one in which an homogenous product is freely traded to sovereign consumers. Perfect knowledge and perfect information exist, so that all sellers, of whom there are many, know the production and sales techniques of all others and can replicate them, and all consumers know where they can always obtain the cheapest products. There are no legal, supply chain, or cost barriers to entry or exit into the market, and consumers are completely elastic, so that average revenue is equal to marginal revenue at the equilibrium price. The price is set purely by the meeting of supply and demand. In such circumstances, normal economic rules apply. Consumers would be seeking to maximise their utility and producers would be seeking to maximise their profits. Profit is the difference between revenue and cost and is maximised where marginal revenue is equal to marginal cost. This means that in a perfect market all profits are normal profits. Firms will only operate to cover oppo...