Submitted to the Foculty of Groduqte Studies ond Reseorch in portiol ...

,
- to -
for foctor substitution qre o consequence of the price $ystem
under perfect competition.
, ,
t'nis ¡rief onotysis is merely to bring out thot the
perfeçtly competitive model provides qn 'ideqI' soLution. It
serves os o criterion of efficient resource ollocotion. j
Bosicolly, the Donish opprooch in qntitrust policy is hrhqt
con bq termed i neut ro l-e ndogenous r. It ottempts to imprgve
i
ollocotive effíciency by simuloting the performance. of .-
competitively strucÈured j-ndustry.
Workoble competition. - Atthough the perfectly competitive
model is o good onolyticol tool, it is not reotistic. probl€ms
of externqlities give risè to 'mork€t foilurer. The very ossump-
tions underlying the model, consumer sovereignty ond the profit
moximizotion hypothesisr hove olso been choll.enged. It is not
surprising, thereforei thqt thè mod€lrs utility qs o policy guide
hqs be€n questioned. Howevêr, o number of economists, olnong them
J. M. iClork (Ret. ¿), hove orgued thot some deportures from the
competitive norm ore relotively hornless in o long-run context.
They hove set out to formulote certoin criteriq for judging the
workobility of competition. Using Sosnik's clossificotion (Ref . 5)l
Schorer enumèrqtes no less thqn sixteen of these criterj,o (net. e
i
p.37). He odmits thqt, while the items on the list ore unobjec-
tionoble, the list os q whole con be criticized for redundoncy.
Onty the moin points wiII be token up here,