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In The Meaning of Competition , economist Friedrich Hayek questioned an assumption of so-called perfect competitionthat all products are identical.


InThe Meaning of Competition, economist Friedrich Hayek questioned an assumption of so-called perfect competition—that all products are identical. He wrote that the goal of all business people is to make their products differ from those of their competitors. How does this relate to Schumpeter's thoughts on the textbook emphasis of pushing price down to average cost?


Competition is about innovation.

Prices often stay above average cost.

Competition focuses on making the most out of opportunity costs.

Firms focus on constraining entry.

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