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is "any departure from the ideal of perfect competition that therefore interferes with economic agents maximizing social welfare when they maximize their own". A proportional wage-income tax, for instance, is distortionary, whereas a
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price for an item that is substantially different from the price that a market would achieve while operating under conditions of
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natural factors that impede competition between firms, such as occurs in
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with no externalities, there is zero distortion at market equilibrium of
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In the context of markets, "perfect competition" means:
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of the market (lack of buyers, sellers, product, or
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