The market structure of perfect competition has a lot of ideal qualities–hence the name perfect.

1. A Respond to the following prompt in a post with a minimum of 200 words.

The market structure of perfect competition has a lot of ideal qualities–hence the name perfect. For example, perfectly competitive firms are productively efficient, and perfectly competitive markets are allocatively efficient. It is, however, difficult to find many examples of perfectly competition in the real world. Perfect competition is really a benchmark against which we compare other market structures in the real world.

How much actual competition occurs in perfectly competitive markets? Some make the claim that there is actually no competition between firms in a perfectly competitive market.

Do you agree or disagree with this claim? What is your reasoning?

2. Respond to the following prompt in a post with a minimum of 200 words.

“Diminishing Returns” is a concept, or more precisely, an empirical finding that shows up in a variety of places in microeconomics. We first encountered it in the module on utility, and then again in this module on production and costs.

What do economists mean by “diminishing returns” to an input? What causes diminishing returns? Have you ever observed this principle at work in a job you’ve had? Describe how you’ve experienced this concept in the real world.

LICENSES AND ATTRIBUTIONS

CC LICENSED CONTENT, ORIGINAL

• Discussion: Diminishing Returns. Authored by: Jennifer Pakula and Lumen Learning. License: CC BY: Attribution