Microeconomics Final Paper

For the purpose this paper I will need to answer several questions beginning with defining and discussing perfect competition and long-run equilibrium. How the proliferation of global trade and competition contribute to markets moving away from market-possessing power to perfect competition. Finally, I will discuss when marginal social benefits equal marginal social cost and why this occurs.

Perfect competition is defined as, "a market structure with many fully informed buyers and sellers of a standardized product and no obstacles to entry or exit of firms in the long run". (McEachern, 2010) Perfect competition is very rare in the many different markets. One market stands out in this type of scenario which is the commodity type markets such as grain. One farmer...