Why Is the Perfect Competition Model Unrealistic

question 39

Multiple Choice

Why is the perfect competition model unrealistic?

• A) Self-seeking individuals actively seek out ways to limit competition to increase personal gains.
• B) Monopoly is more prevalent in the economy than is perfect competition.
• C) Homogeneous products are numerous in the economy.
• D) The model assumes that market structures are dynamic.

---

Definitions:

U.S. Goods

Products that are produced, manufactured, or assembled in the United States.

Foreign Capital Inflow

The entry of investment from external sources into a country, typically in the form of foreign direct investment (FDI), portfolio investment, or loans, contributing to economic development.

Foreign Exchange Reserves

Assets held on reserve by a central bank in foreign currencies, used to back liabilities and influence monetary policy.

Current Account

A component of a country's balance of payments that measures the trade in goods and services, plus net earnings on investments, and direct transfers.