Why do economists prefer to use the model of perfect competition ...

[chandani]

Why do economists prefer to use the model of perfect competition in most economic analysis?

Question 2

When the marginal costs of firms in perfect competition increases, the short-run supply curve of the industry will shift to the left.
 a. True
  b. False
  Indicate whether the statement is true or false

[irishcancer18]

Answer to Question 1

Economists have three main uses for the model. First, its assumptions are reasonably close to actual conditions in some markets. Second, if a market satisfies some but not all of the assumptions, we often start from perfect competition and then see what happens when we replace the usual assumptions with more realistic ones. Third, the perfectly competitive market is a standard for analyzing consumer and producer benefits.

Answer to Question 2

True

[chandani]

Thanks for the timely response, appreciate it

[amcvicar]

Excellent