Question

. Do you think perfect competition is best for the economy and for consumers? Why or why not? What does Peter Thiel think about perfect competition versus monopolies?

Answer 1

Perfect competition in the market is almost impossible to achieve but I can say that it is best not only for consumers but also for economy of a country.

If there is a perfect competition in the market there will be large number of products with perfect substitute which makes the producer the sell the product with good quality and quantity. Producer will not try to take advantage of consumer or cheat them due to competition in the market which is a benefit for the consumer. Consumer will know and have more info on the products that are available in the market which make them to choose the good quality product. Transaction cost will be nil and there will be no negative externalities in the market. Consumer will have to buy the product only on market price. Thus perfect competition is best for both economy and consumer.

According to Peter Theil perfect competition is for loosers if you want to capture a perfect build a monopoly. Theil says that monopoly should be in the market so that firms run in profit which will help them capture Market and earn profits.