Part 1: Special characteristics of purely competitive firms
1. How does the investment banks industry fit into the perfectly competitive model?
2. Does pure competition, as a market model, have any disadvantages for a) producers, and b) consumers? Give examples to substantiate your response.
Part 2: Analyze the conditions required for pure competition to exist in the real world
1. Is pure competition a "desirable" market model for all industries? Should industries aspire for pure competition? Why or why not?
2. Think of an industry that does not function in a purely competitive market currently. Describe the changes that would be required, if this industry wanted to function under pure competition.