The competitive market model is important because
A)It characterizes all the markets in the U.S.economy.
B)It shows how laissez faire can overcome market failures.
C)Many industries function much like the competitive model.
D)It shows that firms can earn economic profits in the long run.

Question

Quizplus · Accepted Answer

Although not all industries function like the competitive model, many do have multiple firms producing similar products and competing for consumers. The competitive model serves as a useful benchmark for understanding and analyzing market outcomes. It is not necessarily related to laissez faire or the ability of firms to earn economic profits in the long run.

The Competitive Market Model Is Important Because