2121Competition and UnrestrictedMarketsuCompetition requires a minimum of twoconditions:–A relatively large number of independentlyacting sellers and buyers.–Freedom of sellers and buyers to enter orexit a particular industry withoutrestrictions (unrestricted markets).And “good” competition requires adequate information to be available to all parties of atransaction as previously discussed.We want a large number of buyers and sellers to prevent what is called collusion. We mayhave a problem with collusion if there were only three auto manufacturers in the world.The three CEO’s could get together on a golf course some where and agree to restrictproduction and drive prices and profits through the roof while at the same time divide themarket up so that each shares equally and will be willing to participate in this act ofcollusion. This may be bad news for consumers. The previous description is basicallywhat is done within the OPEC Oil Cartel.
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OPEC, large number, relatively large number, Peanut, unrestricted markets