Moderate volume of reading assigned, but I expect you to know all assigned reading. Feel free to disagree with me. Just draw supply and demand curves. Intersection gives competitive equilibrium price. Higher-cost producers can't earn a normal rate of return, so they leave the industry.
Man dying of thirst pays the same for a glass of water as anyone else.
Consider a market with only TWO sellers. Suppose you are one of the firms. Suppose there are other firms that could potentially enter the market if they want. If they enter, competition basically works as in the 2-firm case discussed above. In the three cases discussed above, the number of firms in an industry was simply assumed.