The document discusses two key points: 1) It discusses the perfectly competitive market model and how it serves as a benchmark rather than a realistic model. It asks the reader to provide three examples of markets that closely resemble perfect competition. 2) It discusses how innovation and new products often drive economic progress more than price competition. It asks the reader to provide two examples of past products eliminated by innovations, and two current products they believe will be eliminated by future innovations, explaining how and why.

1. 1. The perfectly competitive market model is not so much
intended to give us an accurate description of any real markets,
as much as it is intended to provide us with a benchmark against
which we can compare real world markets. Thus, it serves a
similar purpose as a physicist's model describing the fall of a
feather in vacuum. It is not that the physicist believes that wind
resistance does not matter, rather it is that in order to
understand the effect of wind resistance we must first
understand how the feather would fall if there was no such
resistance to its fall.
That said, there are several markets in which we have a large
number of potential buyers and sellers, where products are
largely homogeneous, where most of the relevant information is
easily available and where there are no formal restrictions on
entry into and exit from the market. In practice, results in those
markets are very close to what is predicted by the perfectly
competitive market model. With this in mind, give at least three
examples of markets that you believe are close to being
perfectly competitive.
2. Most of our formal models of competition in markets tend to
focus on competition that is based on prices and/or quantities
that are produced of well-defined goods. Even so, real economic
progress is generally based more on new products, new
processes, and new ideas than it is based on price competition
per se
. With this in mind, give at least two examples of products that
were eliminated from the market due to innovations and the
introduction of new and "better" products. Also, try to come up
with at least two current products that you believe will
eventually be eliminated based on future innovations. For this

2. latter part, make sure to explain how and why you believe the
products in question will be superseded by future innovations.