why are there no perfectly competitive markets in the world today?

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Expert Solution

The important assumptions of the perfectly competitive market are

There freedom of entry and exit.
The firms are selling the identical
There is perfect knowledge of market condition.
The firm is a price taker

Now a days these condition are never met by any markets, this is because today every producer has got product differentiation which allows him to control the price of the product to some degree. We are saying the agricultural market as close to the perfect competition but products differ in quality so the producer get some product differentiation over that. In the perfect competition there is no barriers to entry, but this is not true every industry has got a start up cost which may act as a barrier to the industry, and such as the government regulations and licenses act against the assumption of no barriers to trade. So most of the assumptions of perfect competition does not exist in the real world so it hard to find a perfectly competitive market.

Rahul Sunny answered 1 year ago

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