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Why is Perfect Competition good for society? Why is Perfect Competition good for society?

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Theoretically, perfect competition leads to low prices and high quality for the consumer. Perfect competition exists when there are no regulations or other external factors affecting decisions made by producers. They are only guided by the forces of supply and demand. Therefore, they will make items available at prices people are able to afford, because if they don't, a competitor will. So in a state of perfect competition, an economy will operate at maximum efficiency. Surpluses and shortages will be met, prices will meet demand, and producers will have to produce goods and services at competitive quality.

Of course, this is only a theoretical situation. Perfect competition is impossible for a number of reasons. These include economies of scale, the ability of people to manipulate markets in different ways, externalities, and many other factors. While government regulation is often seen as a barrier to competition, it is also true that businesses are, through competition, driven to...

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