A perfectly competitive market would drive profits to zero.
It doesn't happen irl because there's no perfect competition. Like for example goods are not perfect substitutes for each other. I can't switch my drill to Black and Decker because then my charger won't fit. Another example is barriers to entry. A "natural monopoly" like a power company is insulated from competition because the costs for an entrepreneur to start their own power plant is too high.
I'm going to go to the grocery store closer to my house even if the that store makes a 2% profit and the store further way is selling things at cost (so slightly cheaper). There are many factors
I was asking why competition does not drive profits to 0
A perfectly competitive market would drive profits to zero.
It doesn't happen irl because there's no perfect competition. Like for example goods are not perfect substitutes for each other. I can't switch my drill to Black and Decker because then my charger won't fit. Another example is barriers to entry. A "natural monopoly" like a power company is insulated from competition because the costs for an entrepreneur to start their own power plant is too high.
I'm going to go to the grocery store closer to my house even if the that store makes a 2% profit and the store further way is selling things at cost (so slightly cheaper). There are many factors