In a perfectly competitive market,

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In a perfectly competitive market, all firms must produce and sell the same standardized product, which means there are no differences in quality or features between the products sold by each firm. This ensures that every firm has equal access to buyers and sellers, and that buyers can freely choose between products based on price alone. Since every firm produces a standardized product, there are no price-setters - instead, the market price is determined by supply and demand. Finally, since there are no barriers to entry, new firms can easily enter and leave the market as they please, which helps to keep prices in check and ensures that firms cannot earn long-term economic profits.

In a Perfectly Competitive Market