To begin with a general abstract answer, it will be evident to anyone with a rudimentary understanding of economic processes and analysis that profit (always in the sense of pure profit) would be absent under the conditions of equilibrium with “perfect competition,” (which may be defined in more than one way). The”tendency” of the competitive processes of buying and selling and the control of production is to impute the whole product to the productive agencies which create it, leaving nothing for entrepreneurship as a distinct function (except for monopoly gain, referred to below). This means that under the conditions of ideal equilibrium (stationary or moving) the function of entrepreneurship itself is entirely absent from the economy.
— Frank H. Knight, “Profit and Entrepreneurial Functions,” The Journal of Economic History 2, (1942), p. 128.
In the theory of competition, all adjustments “tend” to be made correctly, through the correction of errors on the basis of experience, and pure profit accordingly tends to be temporary. While it exists, in a positive form, it may obviously be regarded as a phenomenon of monopoly, and some distinction, which can never be clear, must be made between temporary profit and permanent monopoly revenue.
— p. 128.