Question

What do you think of the idea that markets are efficient? Do the necessary assumptions seem realistic to you?

Answer 1

Answer - In reality the markets are not efficient. Efficient market exist in the case of perfect competition which is very rarely seen . Most of the market are monopolistic or monopoly or oligopoly. In these type of markets , the aasumptions do not seem to be present. There is no perfect information about the product , buyer and seller do not interact to reach a social equilibrium. Seller wants to maximise his surplus and buyer wants to maximise his. But since the products are limited , sellers are in more cases victorious in gaining surplus on their side creating the feeling of being exploited in mind of buyer. Deadweight losses are present in monopoly and oligopoly making the markets inefficient.