Perfect competition sometimes is regarded as an ideal market structure because it supports the actual ideology of a free market economy where, for example there is no government intervention. The entrepreneur in perfect competition works independent of other entrepreneurs and each individual buyer or seller does not influence the market, there are perfect substitutes for all goods and the demand is perfectly elastic, hence there is no price rise or fall. As should be, there …
showed first 75 words of 557 total

showed last 75 words of 557 total
…MC=Price and this is the point where profits are maximized. This is hardly possible in real life, the MC curve will either be less than the MR or more, it's hard indeed for them to be perfectly equal. Some firms operate on short run and do not tend to be perfectly competitive One reason why perfect competition does not represent the face of the modern industry is because it is so hard to achieve.