3. Why do you think economists really like to talk about competitive markets?
4. What does the concept of low or no barriers to entry mean? Why is it so important to understand barriers to entry?
5. Give me 5 examples of price takers in perfectly competitive markets.
Answer - Most of the economists like to study about the competitive market and not the other forms of market. This is because this market presents the perfect model of the ideal market and shows how the market in the real world should be. These markets are the most efficient markets and are perfectly based on market forces which help in understanding the perfect behaviour of market. The level of knowledge in this market is highest and insights gained from this market are directly applicable to the real world. However this market is rarely found in real world.
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