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Uniten Profile and Articles
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1). The Incompatibility of Perfect Competition and Substantial Economies of Scale.
Why is perfect competition so rare in the real world - if it even exists at all? On important reason for this has to do with economies of scale.
In many industries, firms may have to be quite large of they are to experience the full potential economies of scale. But perfect competition requires there to be many firms. Firms must therefore be small under perfect competition: too small in most cases for economies of scale.
2). The Motive for Holding Money
The demand for money refers to the desire to hold money : to keep your wealth in the form of money, rather than spending it on goods and services or using it to purchase financial assets such as bonds or shares. It is usual to distinguish three reasons why people want to hold their assets in the form of money.
The transaction motive . Since money is a medium of exchange, it is required for conducting transactions.
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