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Sagot :
Perfect competition is thought of as a theoretical idea rather than something that applies to contemporary industry. This is solely attributable to the way that markets are naturally influenced by economic variables, which leads to a clustering of elements.
Criticisms of perfect competition
Some of the criticisms of perfect competition include:
- It is frequently argued that the foundation of price theory for product markets, represents all agents as passive, omitting the active attempts to increase one's welfare or profits through price undercutting, product design, advertising, and innovation.
- Another criticism is that of who sets the price to be followed. The perfect competition model can thus be used to explain a centralized economy rather than a decentralized "market" economy. This implies that such a model is more closely related to communism than to capitalism.
- Another common criticism is that it is frequently untrue that shifts in supply and demand over the short term affect prices; this is especially true in the manufacturing sector, where production adjustments frequently occur without significantly affecting prices.
Learn more on perfect competition here https://brainly.com/question/2964027
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