4 ms·
A system with truly "free markets" in a hypothetical economic system will have perfect competition [1], which includes zero cost to enter and exit markets, larg
by coldbrewed 3y ago
A system with truly "free markets" in a hypothetical economic system will have perfect competition [1], which includes zero cost to enter and exit markets, large numbers of buyers and sellers, rational buyers, perfect information, and profit maximization of sellers (among other attributes). In this hypothetical model sellers cannot capture excess value because competitors will take that opportunity to capture larger market share.
Excess profit capture represents market failure or disruption.
[1]: https://en.wikipedia.org/wiki/Perfect_competition https://en.wikipedia.org/wiki/Perfect_competition
- tetris11 3y agowon't someone have to go around making sure that all the competition is above board, and that cartels aren't being formed by big players to maximize their collective profits? A person who might regulate such things.