Why is pure competition considered an unsustainable system? Price differentiation is often too minimal to matter. Few barriers exist to entry, meaning that the market inevitably floods. Consumers cannot distinguish between products. Producers cannot make a profit if they keep dropping their prices

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Esther Shelton

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21 October, 09:38

Why is pure competition considered an unsustainable system? Price differentiation is often too minimal to matter. Few barriers exist to entry, meaning that the market inevitably floods. Consumers cannot distinguish between products. Producers cannot make a profit if they keep dropping their prices

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Ean Daugherty · Answer 1

The correct answer should be Producers cannot make a profit if they keep dropping their prices

If you and your competition make the same product of the same quality, one of the few ways to get buyers is to be cheaper than your opponents, and eventually your company will have to be closed because you will start losing money when inflation kicks in.

Herp Derp · Answer 2

Producers cannot make a profit if they keep dropping their prices