Perfect competition is described at its 1. worst 2. most efficient 3. totally outdated in understanding real economic world or 4. both 1 and 2.
Who is describing perfect competition?
To determine who is describing perfect competition, you can start by understanding what perfect competition is. Perfect competition is a market structure characterized by a large number of buyers and sellers, homogeneous products, perfect information, ease of entry and exit, and no individual seller having control over the market price.
Now, going back to the question, it is asking who is describing perfect competition. Since the question does not provide any specific information, we can assume that it is asking generally about how perfect competition is described.
In this case, option 4, "both 1 and 2," seems to be the most appropriate answer. This means that perfect competition is described both as the worst market structure and as the most efficient market structure.
It is considered the worst by some economists because in perfect competition, firms cannot earn economic profits in the long run due to intense competition and lack of market power. This makes it difficult for firms to cover their costs and make substantial profits.
On the other hand, perfect competition is also considered the most efficient market structure because it leads to allocative efficiency. This means that resources are allocated in a way that maximizes overall welfare in society, as prices are determined solely by supply and demand forces.
So, the answer to who is describing perfect competition would be economists or individuals studying economics and market structures.