there exists a fundamental contradiction in capitalist ideology: Competition is regarded as a virtuous necessity, but firms are driven to dominate particular industries in practice. explaine and analyze competition in Adam Smith and John Nash 's prespective.  long and explanatory, detailed answer please

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Asked Dec 14, 2019
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 there exists a fundamental contradiction in capitalist ideology: Competition is regarded as a virtuous necessity, but firms are driven to dominate particular industries in practice.

 

explaine and analyze competition in Adam Smith and John Nash 's prespective. 

 

long and explanatory, detailed answer please

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Expert Answer

Step 1

Capitalism is defined as the economic system that would be based on the private ownership related to the means of the production along with the operation for profit. The general characteristics of capitalism would include private property, includes capital accumulation, wage labor, along with the voluntary exchange, has a price system along with the competitive markets.

The capitalist economy would have the main features such as the private property, it would include the price mechanism, having freedom of enterprise, having the sovereignty of consumer, should include a profit motive and it would have no government interference:

Step 2

Adam Smith's belief in the competition was every boy "in competition, individual ambition serves the common good".  It suggests, how the group of competitors firms should aim for the one sole target, goals and objectives, rather than focusing on them elsewhere. John Nash equilibria's decision making focuses on the dilemma along with achieving an interactive outcome that could risk a social catastrophe. In the competition, Nash explains how an individual firm would make a particular decision and how the decisions would be made after effect one individual to others.

It is true, that the companies are driven by competition and they woul...

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