<P> Often, governments will try to intervene in uncompetitive markets to make them more competitive . Antitrust (US) or competition (elsewhere) laws were created to prevent powerful firms from using their economic power to artificially create the barriers to entry they need to protect their economic profits . This includes the use of predatory pricing toward smaller competitors . For example, in the United States, Microsoft Corporation was initially convicted of breaking Anti-Trust Law and engaging in anti-competitive behavior in order to form one such barrier in United States v. Microsoft; after a successful appeal on technical grounds, Microsoft agreed to a settlement with the Department of Justice in which they were faced with stringent oversight procedures and explicit requirements designed to prevent this predatory behaviour . With lower barriers, new firms can enter the market again, making the long run equilibrium much more like that of a competitive industry, with no economic profit for firms . </P> <P> If a government feels it is impractical to have a competitive market--such as in the case of a natural monopoly--it will sometimes try to regulate the existing uncompetitive market by controlling the price firms charge for their product . For example, the old AT&T (regulated) monopoly, which existed before the courts ordered its breakup, had to get government approval to raise its prices . The government examined the monopoly's costs, and determined whether or not the monopoly should be able raise its price and if the government felt that the cost did not justify a higher price, it rejected the monopoly's application for a higher price . Although a regulated firm will not have an economic profit as large as it would in an unregulated situation, it can still make profits well above a competitive firm in a truly competitive market . </P> <P> In a perfectly competitive market, the demand curve facing a firm is perfectly elastic . </P> <P> As mentioned above, the perfect competition model, if interpreted as applying also to short - period or very - short - period behaviour, is approximated only by markets of homogeneous products produced and purchased by very many sellers and buyers, usually organized markets for agricultural products or raw materials . In real - world markets, assumptions such as perfect information cannot be verified and are only approximated in organized double - auction markets where most agents wait and observe the behaviour of prices before deciding to exchange (but in the long - period interpretation perfect information is not necessary, the analysis only aims at determining the average around which market prices gravitate, and for gravitation to operate one does not need perfect information). </P>

In the model of perfect competition there are