My Economics

Input Payments

1. Land receives rent.
2. Capital receives interest.
3. Labor receives wages.
4. Entrepreneurship receives profit.

(Perfect) Competition

Principles Concept
Perfect competition requires output revenue equaling input cost. It does not require zero profit. It requires the sum of rent, interest, wages, and profit to equal zero. Using this framework, the operating system market could be in perfect competition. The profit Bill Gates receives could be required for his entrepreneurship.

Intermediate Concept
Perfect competition has no bearing on society. It is an abstraction that can be applied to every market. It teaches competition can secure an outcome where laborers, stockholders, and landowners, and entrepreneurs are paid their market value. It says nothing about "fairness."

Competition creates market values. What these market values mean is debatable.

Advanced Concept
Market values are fair values. Laborers, stockholders, landowners and entrepreneurs are paid their worth. Individuals not happy with their allotment can change. Laborers can move to different jobs or become stockholders or landowners. Individuals make their own decisions. Individuals making their own decisions is proper.

But perfect competition only occurs in a society free of government intrusion...