Final answer:
A perfectly competitive market is characterized by no barriers to entry, identical product offerings, and the existence of many buyers and sellers with perfect information. Firms are price takers and can freely enter and exit the market. Profits tend towards zero in the long run due to the ease of entry and exit.
Step-by-step explanation:
The characteristic that defines a perfectly competitive market from the options provided is no barriers to entry. In a perfectly competitive market, firms produce homogeneous or identical products, and there are numerous buyers and sellers with perfect information making rational decisions. Besides, firms have the freedom of entry and exit to and from the market, meaning there are no significant obstacles preventing new firms from starting up or existing firms from leaving the industry. This level of competition means that individual firms do not have any market power to influence prices; they are price takers because the products are so similar that the only factor affecting a buyer's choice is the price.
In the short run, firms in perfectly competitive markets may earn profits or incur losses, but in the long run, due to the ease of entry and exit, economic profits tend towards zero. This is because if firms start making profits, new firms will enter the market, increasing supply and lowering the price, leading to normals profits. Conversely, if firms start making losses, some will leave the market, decreasing supply and increasing prices, which eventually eliminates the losses.