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Which is best perfect competition or monopoly?

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Which is best perfect competition or monopoly? Perfect competition is a market or industry characterized by a very large number of small firms producing an identical product. None of the firms have the ability to influence price. Instead, the firms are "price takers" in that they can sell all they are able to produce at a given price. There is free mobility of all resources so that the conditions of entry and exit into and out of the market are very easy. All buyers and producers have complete and perfect knowledge as to present and future prices. The demand for the product is perfectly elastic. Perfect competition is the easiest of the market structure models to start out with. In perfect competition, we can look at the principles and ideas that cover most aspects of market structure, without adding too much initial complexity. Then we will determine how much output the firm produces, whether the firm should produce that amount of output and whether the firm makes a profit or a loss. ...read more.


This implies that there be no transaction costs. Being a single seller, by itself, is not good, nor evil, it depends on how one obtained that single-seller status. Did one obtain a monopoly by economic competition in the marketplace, or did one obtain it by political pull, i.e., lobbying? If such status is gained by competition in the free-market then the "monopoly", the successful business, is good. If such status is gained by using the government, or Mafia, to force one's competition out of business, then the monopoly is evil. As all political intervention (initiation of force) in the marketplace is outlawed under capitalism, a harmful monopoly under capitalism is impossible. If one considers a monopoly by definition as intrinsically evil, then only "businesses" that obtain their market share by having their competition outlawed can be called a "monopoly". If any company is a single seller in any industry and starts making profits higher than other industries, due to high prices; it will attract competition into its industry, as other capitalists move their capital from less profitable markets to more profitable ones. ...read more.


Monopolies are not intrinsically evil (big is not inherently evil), nor are monopolies subjectively evil; monopolies are good or evil depending on how they are formed. If formed according to the laws of the free market capitalism they are objectively good. If formed through irrational political policies they are objectively evil. There is no such thing as a profit that is too high or too low. That is, there is no such thing as an "excessive" profit. There is only the profit that men earn. Market Structure Number of Producers Unrestricted Entry and Exit Ability to Set Price Long-Run Economic Profits Nature of Product Perfect Competition Very Large Yes None Price Taker No Standardized Monopolistic Competition Many Yes Some No Differentiated After looking at the facts of both monopolies and perfect competition, in my opinion I think that they are both good in different ways, they both have advantages and disadvantages. Although if had to choose one, I think it would have to be a monopoly. A monopoly is a really good idea, so long as it is achieved in the right way. ...read more.

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