| Perfect Competition |
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| n | An efficient
free market requires producers to be |
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| operating
under conditions of perfect competition. |
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| This requires
a stringent set of conditions - perfect |
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| information,
many buyers and sellers, a uniform |
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| product and
freedom of entry and exit. |
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| n | If producers
do not operate in this way and, in |
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| particular,
if they have a significant power to influence |
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| price or the
total quantity being produced, then the |
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| market will
fail. Dentists and other suppliers of health |
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| care often have this
power. |
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