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Hiding a Cure For Cancer or a Treatment?

Abbreviated Question: 
Hiding a Cure For Cancer or a Treatment?
Answer: 

You have put your finger on an important topic that economists have been arguing about since Kenneth Arrow’s analysis of the incentives to innovate in “Economic Welfare and the Allocation of Resources for Inventions” in _The Rate and Direction of Inventive Activity_, edited by Richard Nelson (1962).  As the subsequent discussion illustrates, one can, with different plausible assumptions produce situations in which the incentive will be either to introduce the superior innovation (cure for cancer) or to hold it off the market.

Is there a resolution to the perfect market dilemma?

Abbreviated Question: 
Is there a resolution to the perfect market dilemma?
Answer: 

"I read a summary of perfect competition which said that: 1. All market participants have perfect knowledge."

Perfect competition or monopoly?

Abbreviated Question: 
Perfect competition or monopoly?
Answer: 

The local mussel farm has a cost advantage in supplying in its own town mostly because it saves on transportation costs. Even with that cost advantage, the local firm may not be able to fully exert monopoly power on the local market. It is easy to imagine that farms in nearby villages could compete on the local market. The existence of that potential competition will limit the market power of the local farm depending on the cost of producing mussels locally, transportation cost and the price of mussels coming from outside of the village. There are two cases to consider.

Does the model of perfect competition apply equally to consumers as it does to firms?

Abbreviated Question: 
Does the model of perfect competition apply equally to consumers as it does to firms?
Answer: 

Yes, economic theory traditionally has emphasized the role of the entry and exit of firms in dividing market surplus. In microeconomics, free entry and exit of firms is an important part of the assumption of free competition. For macroeconomists, modeling entry and exit of firms is important because it is directly related to the creation or destruction of jobs.