00:01
So here we're talking about perfect competition.
00:03
And we need to think which of these things are consistent with perfect competition, right? so well -informed agents, right? this is true.
00:13
Perfect competition is the idea that, you know, a brutally competitive marketplace where people shop around for the absolute best deal.
00:23
Shopping around for the absolute best deal to prevent any company from making profits requires well -informed agents.
00:28
If you don't know what the prices and where the other companies are, you can't shop around.
00:33
So, yeah, absolutely.
00:34
Perfect competition requires well -informed agents.
00:38
B, firm advertising.
00:42
This is the false one, right? this is false.
00:49
The idea here is that this would indicate different firms.
00:54
Firms are different.
00:55
And that's not okay in perfect competition.
00:57
The idea in perfect competition is that every firm is identical, right? that they are engaged in cutthroat competition selling an identical product.
01:08
If the products are different, if the products are different, it's not perfect competition because if my product is different than yours, we are different, right? it's not perfectly competitive.
01:18
We are distinguished from each other in some way, right? so if individual firms are doing a ton of advertising for their own product, it must signal that their product is different in some...
