Why economic analysis insist on such unrealistic analysis

Reference no: EM13182668

The simple case of pricing with market power assumes

(a) all consumers are charged the same price,

(b) the firm sells one product,

(d) competitors do not pursue pricing games. Economists insist on reviewing what happens as each assumption is relaxed one at a time. However, it is clear that in real world all four are relaxed simultaneously. Why does economic analysis insist on such an unrealistic analysis?

Reference no: EM13182668

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