...assuming perfect knowledge, zero friction, infinite fungibility, zero collusion and an infinite number of possible buyers and sellers.

And what do we say about assumptions?

Yes I covered it in Micro 100. 

It's an interesting thought experiment, but the way econ grads wave it around serves mainly as evidence for the charge that economics, like the other social sciences, suffers greatly from "physics envy". 

 So much of Keynesian economics could be debunked in 1 hour in a room with 5-10 people and some post-it notes.

Easy to show how money printing leads to inflation, or how supply&demand can’t simply be modelled out as intersecting points on a graph, why value is subjective, information asymmetry etc etc etc