Pure competition:
A) provides an ideal against which real world markets can be judged.
B) would lead to excess profits in the long run were it not for the antitrust laws.
C) is found mainly in industries, such as the telephone industry, where firms are highly regulated by the government.
D) does not serve consumers' interests as well as other market structures.

Question

Quizplus · Accepted Answer

Pure competition is considered an ideal or benchmark in economic theory, allowing for the assessment of real-world market structures against its characteristics, such as a large number of small firms, identical products, and free entry and exit from the market. It is not characterized by long-term excess profits, heavy regulation, or poor service to consumers.

Pure Competition