[speedplane]

There is a mathematically based definition of a perfect market. It’s only an approximation of real life, but it’s heavily used: https://www.investopedia.com/terms/p/perfectcompetition.asp

[WalterBright]

Your reference says:

"Companies earn just enough profit to stay in business"

which contradicts your comment:

"in a “perfect” market there cannot be profits"

[mhh__]

I think the idea is that in the limit T->inf the profits go to zero.

[WalterBright]

That's not what the referenced definition of a "perfect" market says.

Besides, who would run a business that could not make a profit?

[mhh__]

I've had this exact discussion with friends who study economics. The idea is that in a market with perfect flow of information (i.e. fairy land) then the profits tend to zero, I don't think this is a model for much of the real world if any.

[WalterBright]

> then the profits tend to zero

That makes as much sense as people working for nothing. I don't see any explanation for profits tending to zero, either.

I wonder why "perfect" markets are even a thing. It has no applicability to actual markets. It offers no insight on actual markets, and offers no useful predictions about markets. It's about as useful a model as the Monopoly game is - i.e. none.

I've seen many people claim that a "perfect" market is a requirement for free markets to work well. This isn't remotely true. "Perfect" markets and free markets have nothing in common.

"Perfect" markets just seem to be a strawman put forth by people who argue that since "perfect" markets are unachievable, therefore free markets are no good.