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What use is the competitive model if no truly competitive firms exist?

What use is the competitive model if no truly competitive firms exist?

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Answer #1

A truly competitive firms is an ideal setup in the market i.e. it is both the productive and allocative efficient in the market and to increase the total efficiency and surplus in the market its the perfeclty competitive model that should be followed.

All the other models are different from this an a perfeclty competitive market do not exist, the main motive of having a this model is to set a standard of what the other markets in the market should strive to achive and if we want to have the most efficient market how it will actually look like. This also helps setitng rules and regulations to achive a standard in the market.

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