Equilibrium in a Perfectly Competitive Market Results in the Greatest

question 164

Essay

Equilibrium in a perfectly competitive market results in the greatest amount of economic surplus, or total benefit to society, from the production of a good.Why, then, did Joseph Schumpeter argue that an economy may benefit more from firms that have market power than from firms that are perfectly competitive?

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Definitions:

Social Change

The alteration over time in the structures, cultural patterns, and norms of a society.

Total Institutions

Places where people are separated from the rest of society and controlled by the institution in all aspects of their lives, as defined by Erving Goffman.

Coercive Organizations

Organizations where membership is not voluntary and is often maintained through force or other forms of coercion, such as prisons or the military.

Social Media

Platforms and websites that enable users to create and share content or participate in social networking.