The Emphasis on Competitive Markets in Introductory Microeconomics Courses

The microeconomics principles course focuses on competitive markets far more than any other market structure. This paper considers the possible reasons. We suggest that this focus might be because: (1) competition is descriptive of many important real world markets (2) competition is viewed as a useful approximation to a wide array of real world markets that are not strictly competitive; (3) competition is emphasized because it is a simple model; (4) competition is viewed as an “ideal” market structure in efficiency terms, creating a standard used to evaluate other market structures and the merits of government intervention. We find none of these reasons convincing. We are led to conclude that either the focus on competition is an historical curiosity, which we can now dispense with, or it is the result of an ideological bias.