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Respond to each prompt in a post with a minimum of 200 words.
1. The market structure of perfect competition has a lot of ideal qualities–hence the name perfect. For example, perfectly competitive firms are productively efficient, and perfectly competitive markets are allocatively efficient. It is, however, difficult to find many examples of perfectly competition in the real world. Perfect competition is really a benchmark against which we compare other market structures in the real world.
How much actual competition occurs in perfectly competitive markets? Some make the claim that there is actually no competition between firms in a perfectly competitive market.
Do you agree or disagree with this claim? What is your reasoning?
2. We’ve observed that there are few examples of perfectly competitive markets in the real world, yet we use the model of perfect competition as a comparison with other market structures. Can you think of any examples of monopoly in the real world?Describe something you believe could possibly called a monopoly and explain why it fits the characteristics of a monopoly.
Is your example a true, unregulated monopoly? (For example, Microsoft has been called a monopoly, but it is not the sole producer of computer operating systems, so strictly speaking it’s not a monopoly.)
If there are few true monopolies, what can we learn from studying that market structure?